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U.S. frustration with China as coronavirus toll reaches 300,000 deaths worldwide. President Trump says- "They could have stopped it in China where it came from. But it didn't happen that way. " Worst hit are countries in Asia and Africa with food security threatened. After the coronavirus he says of the trade deal he signed in January- So, I make a great trade deal and now I say this doesn't feel the same to me.The ink was barely dry, and the plague came over. And it doesn't feel the same to me." Under that trade deal the China agreed to buy $250 billion in additional goods and service for 2 years in an effort to correct a huge trade imbalance - built up on the advice of American economic theorists and experts who advised American presidents for three decades that it was of no consequence - in exchange for a roll back of American tariffs in stages of part of the tariffs. 

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Overall consumer prices were up 4.4% higher in October 2010, than a year earlier, according to the National Bureau of Statistics. Most of the increase in prices was concentrated on food and energy. China is taking action to limit price increases. During previous rise in inflation in 2004 and 2005, the government has resorted to detailed price controls. China's cabinet of ministers, the State Council, has issued orders that local governments and other government entities provide temporary subsidies to help the needy cope with rising prices and to increase allowances for needy students. Chia fears social unrest if prices go much above 5%. The Food and Agriculture Organization of the UN warns that food prices have gone up by 10% in the poorer countries. According to economists, China is effectively printing its currency renminbi to buy $1 billon a day worth of dollars to keep the renminbi weak, so that its exporters retain an advantage in overseas markets. The central bank takes away some of this renminbi but not all from the system, by selling bonds to state owned banks and increasing the amount of reserves required at the central bank. To keep the renminbi from rising, China's central bank buys up the investment dollars that are coming into the country, as well as dollars coming into the country from the trade surplus....

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The Chinese government raised the retail price of diesel by 18% to the equivalent of $3.58 a gallon, and the price of gasoline by 16% to $3.83 a gallon. Electricity prices and the price of jet fuel were also increased. The Chinese government decided that it could not provide subsidies for the rising prices of oil indefinitely even if the price increases mean higher inflation. Inflation was 7.7% in May 2008, and 8% in February, March and April. Prices for gasoline and diesel have been fixed in China since Nov 1, 2007, even though world oil prices have risen 45% in this period. Farmers were exempted from the price increase and tractors and farm equipment get priority allocation of fuel, three quake hit provinces of Sichuan, Shaanxi and Gansu are also exempt.

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Zoom's deal to buy an American services software company Five9 for $15 billion is under US government review because of China ties. 

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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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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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This visual in The Guardian shows how the center of gravity for carbon emissions has moved from Britain, to the US, and now to China.

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

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GM's joint venture with Luizhou Wuling Motors has produced a win-win situation for both companies. Wuling was a small, regional manufacturer when the joint venture started. Now Wuling has more than 1 million in unit sales. And GM has benefitted from the rapidly growing sales. Year over year sales were 29% in 2010, and were slowing to 10% in 2011, with the end of government incentives. Wuling vans can now be sold under the GM brand in India, using lower cost manufacturing in China. Looking back this was good for GM. The future however has some twists and turns and could turn out to be different. Wuling joint venture will produce cars at a lower price point under the Baojun brand. These cars were shown at the Shanghai Auto Show, and will be marketed to customers who are looking for affordable cars in the second and third tier cities in China. The Baojun brand joint venture will have one difference. This brand involves intellectual property being held in common with Wuling Motors. This is part of China's new plan for American and European manufacturers in China- the price of access to the Chinese market is greater technology sharing with Chinese partners. In the long run this should enable Chinese manufacturers to be dominant inside China. This process is already underway. According to J.D. Powers, Chinese brands had 32% of the domestic passenger vehicles market in 2010, up from 18% in 2000. Something similiar happened with Japan, where Nissan was making Britain's Austin A40 series in the mid-1950's. By the 1960's the foreign tieups were replaced by Japanese manufacturers dominant in the home market and exporting their own models. ...

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Only by learning the lessons of "normal" trade with China, and accepting a feeling of "buyers remorse," says Senator Sherrod Brown of Ohio, will a better bilateral trade relationship with China evolve. He points out that every $1 billion of the trade deficit with China, has destroyed 13,000 net jobs, making the $226 billon deficit a tale of shuttered factories and devastated communities. He says China uses illegal subsidies and currency manipulation, and punitive steps are needed, not the moral suasion that the Obama administration keeps doing with no result. He says price manipulation keeps Chinese products 40% cheaper than comparable American made products. He wants the Senate to give tariff authority to the President, to impose tariffs on countries that manipulate their currency, when it convenes next month. Brown is the author of the book- Myths of Free Trade.

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China is increasing export rebates aand investing in vocational training to keep the economy growing . Laid off workers are returning to their farms. THe real impact on growth and industrial production will come in 2009 according to Clement Chen, the chairman of the Federation of Hong Kong Industries. Because China has sustained a high growth rate for so long and the US has not yet felt the full impact of the recession it is possible to underestimate the impact on China's export dependent economy of a deep slump in exports as western markets shrink. The current 9% for the third quarter which does not reflect the credit crisis of October in global markets shows merely the early impact of slowing growth, with serious debt induced dowturn in the western economies China could see its growth drop to 6-7%.

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Hitachi supplied signalling technology components for safety on China's high speed trains. Hitachi was the supplier to Beijing based Hollyss Automation Technologies Ltd., which is one of the two suppliers along with China Railway Signal & Communication Corp (CRSC) for the signalling equipment. To protect its proprietary technology from competitive threats Hitachi uses zumen or "black box" so that the components cannot be reverse engineered. Experts say that as a result Chinese engineers did not have a good grasp of how crucial aspects of the safety tecnology worked, leading to the collision of two bullet trains in 2011. The key components of the ATP, the Automatic Train Protection, the onboard brain on the trains, was supplied by Hitachi. Engineers at French company Alstom SA's China operations say China needs time to master the complicated technology acquired in the last seven years of the high speed rail program.

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Plans to introduce its Luma line to China by June 2012 in cooperation with China Telecom. It is betting on Chinese demand for smartphones to recover. Sales of CDMA phones- China Telecom uses CDMA technology- are expected to double to 60 million in 2012 from 30 million in 2011. China provided 17% of Noka sales in 2011, mostly basic or older phones. The challenge is now to get the Lumia line up and running fast. Nokia's timing is right as smartphones are just beginning a surge in China- IHS forecasts an increase from 65 million in 2011 to 120 million in 2012. Nokia's advertising and marketing and close work with China Telecom has also to kick in for it to maximize on this opportunity.

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No question about it there is herd behaviour, as one of the research analysts points out. Almost $10 billion raised in a Bank of China IPO. For retail investors this is oversubscribed by as much as 80 times and oversubscribed for instituional investors by 20 times. And China's banks lack transparency about the amount of bad loans on their books. Estimates of Ernst and Young and OECD suggest huge amount of bad loans still on the books. IMF analysis by Richard Podpiera as cited in the NYT suggest that the lending to favored parties continues unabated. The Russians are catching on about doing IPO's for their oil companies.The OECD estimate cited by the NYT is for another $203 billion needed to be injected in the banking system by China.

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Hon Hai chairman Terry Gou told corporate employees that Hon Hai plans to increase the number of robotic arms in its manufacturing plants from 10,000 to one million by 2013. He says the move will "improve working conditions and provide a better career path to employees." The improvement of working conditions is a major concern after a number of suicides. The plans to automate dangerous and monotonous tasks is intended to migrate workers to other work. Hon Hai has about 1 million employees in China. It is moving plants to the less costly interor of China where wages are lower- to Chengdu, Wuhan and Zhengzhou from the coastal areas.

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Kenneth Rogoff of Harvard University, expert on debt crises, and author of "This Time is Different," says China is one of the best examples of the idea that this time is different, with the idea created that somehow China was impervious to the massive build up of debt. The debt is now over 250% of GDP, and this was possible for so long because of the high savings rate of 30% of disposable income and the millions of young migrants moving to cities to work in manufacturing. The growth of shadow banking, opaqueness in decisionmaking, unreliable data, use of local government financing vehicles, the bubble in housing with a large portion of loans tied to the real estate market, all combine to create serious problems that will take a long time to sort out. Rogoff says the crisis in Tianjin with the deadly explosions in the port area, and the government's inability to provide answers to questions from a alarmed public, only added to the uncertainty and loss of credibility. Rogoff says he hopes the trillions of dollars in reserves will provide China with the tools adequate to tackle the debt problems before they spread to other countries....

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A new foreign investment law passed by the Chinese People's Congress is designed to address concerns of western companies facing problems operating in China. This includes unequal market access, forced technology transfers, unfair treatment in public procurement. It was passed in only 3 months after the first draft was debated showing the importance Beijing places on the bill. Its a step designed to help in the trade talks with the U.S. about leveling the playing field. China amends its intellectual property law and introduces a punitive damages "mechanism" so that infringements are fairly dealt with. The new Chinese law replaces three foreign capital laws passed between 1979 and 1990, and is a unified legal standard for foreign investment in China. It eliminates the requirement for foreign companies to transfer proprietary technology to Chinese joint venture partners and protects against "illegal government interference." The European Union Chamber of Commerce says Article 40 still allows for"political issues to influence investor-state relations." Experts say this is a small step in the overall effort to level the playing field. ...

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A food scare for Danone's Dumex baby formula brand in China hurt sales. Danone has decided to swap the Dumex brand for additional stake in China's dairy company Mengniu, for a 12% stake in the company. Danone will focus on ecommerce business in China which has grown rapidly to about 461 million consumers as more baby food products are sold online. About 7% of total sales are from China for Danone. Danone has also decided it will keep the medical nutrition business line because of better future prospects. Earlier Danone sold off its majority stake in a joint venture with Wahaha in China. Business decisions at Danone are made by two executives Mr. Ribaud and Mr. Faber, the CEO. Fresh dairy unit of Danone faces several challenges, including rising price of milk, and margins dropping from 15% in 2010 to 10% in 2014. Fresh Dairy generates over 50% of revenues.

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Young people in China express their anxiety about the economic situation in China on social media sites Weibo and WeChat. People compare the situation today in China with the situation in Japan after 1987. Young people worry about job security, some car-pool to save on gas, and others reduce expenses to increase savings. Lin Mo runs a financial column offering advice to readers on WeChat online site. In 2015 7.5 million new graduates will come out of Chinese universities, up 3% from 2014. There is a great deal of anxiety for these graduates as new job opportunities will be fewer for those not well connected or having skills in high demand.

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Land reforms in China to improve rural incomes and increase agricultural production with larger farms to keep food price inflation down two key goals in today's China. And both long neglected in the headlong rush to industrialize and urban centred modernization which left a huge gap which now must be fixed that gap in incomes for the rural 700 million peopr in the countryside who have seen their incomes stagnat and the rural -urban gap widen with farmer protest against corrupt officials seizing land for factories exacerbating the situation for years. Only the 10-12% a year growth has kept the situation under some control as rural folk could depend on income from migrant labor or the young women who left the countryside to work in cities where factories for exports turned out goods for western markets. With this market in serious trouble in debt burdened western societies China may be looking at growth of half the previous rate down to 6%,and so this is move to change the focus to building a bigger domestic market through raising rural incomes as well as urban incomes and shift China's focus to the domestic and Asian markets like India and other Asian countries....

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Vigorous and eloquent testimony before Congress by Treasury Secretary Scott Bessent, answering questions from Republicans and Democrats. Bessent had just landed from London at 3 am in the morning and after 3 hours of sleep took the time to answer over 5 hours of questioning by members of the House of Representatives. In question after question he explained how the certainty offered by the tax cuts bill would help small business and job creation in the US. The permanence of the 100% expensing of buildings and equipment would help farmers and small business , regulations would be cut, and manufacturing would take off. Manufacturing employs 9% of the workers in the US and their wages will rise faster than for service workers. The combined effects of the improvements for small business, farmers and for manufacturing workers will help the American middle class, America's working class, and increase the growth of the economy. Bessent points out that in the original bill of which the new tax bill is an extension the top 10% paid 7% more in taxes in 2017. He also points out that workers were hurt the most by the slower rise in wages and the rise in cost of living of 21% in 2021-2022, which he says was in essential goods with the actual impact of about 30%. With higher jobs creation by small business and more investment in the economy more able bodied men can join the workforce and gain healthcare benefits under new rules. He pointed to low inflation at 2.1% and to higher job creation, and to higher growth in the economy of 2.6%, that with other savings could lower the deficit. ...