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Negotiations between European leaders, especially Germany's Merkel and the Obama administration on climate change at G8 meeting. The U.S. and Europe try to work out differences. The U.S. is vague about some language such as the starting year against which emissions reductions will be measured, and has resisted the European pressure to set strong goals over the next 10 years. Europe wants 1990, while the USA, Australia and Japan prefer 2005. Europe wants to see language in aformal document that is being developed for the G-8 meeting, which also includes developing countries, for limiting the rise in global temperatures to 2 degrees celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels.

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Projections by the U.S. Energy information Administration and the International Energy Agency for oil supplies and demand 2010-2035. Continued high growth in demand in India and China, and declining demand in Japan, U.S. and the EU.

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Porter cites research by Andrew Berg and Jonathan Ostry of the IMF, which shows the strong connections between having a vibrant middle class, lower inequality and the sustainability of economic growth. In countries with higher inequality growth comes in spurts which fizzle out, and there are sharp contractions. Having good income distribution is important according to Berg and Ostry, if the process of economic growth is to be sustained. This logic is also supported by the need for a strong middle class for consumer spending, to provide the demand that supports growth.

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China's state run companies constitute about 45% of China's economy, according to the U.S.-China Economic and Security Commission. This includes banks such as Industrial and Commercial Bank of China, China Petrochemical Corp. or Sinopec Group, and China Mobile.

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China announced that it would make its exchange rate flexible, but also emphasized that it would do so gradually. What this means is that China will have a managed floating exchange rate. China followed a managed floating policy between mid 2005 and mid 2008, with a 21% upward valuation during that period for the yuan. During the 2008 crisis upto now the rate was pegged. The yuan was pegged at 6.83 yuan to the dollar. China is now rebalancing its economy so that it is not overly dependent on exports. The idea is to let domestic wages and domestic consumption pick up the slack in the markets of Europe and the USA. Europe is taking up austerity measures, and the mood in the US is shifting towards concern about growing budget and trade deficits. See the groups for "China wages" and "China workers."

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Xi Jinping visits a dairy farm in Ireland and kicks a ball at a Gaelic football game. A new view of the Chinese leader up close in contacts with people in Ireland. Ireland takes on the presidency of the EU in 2013.

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China's new leader Xi Jinping and the prospects for U.S. and European business. Little is known of how Xi will change things except for his personal style during his visit to Iowa during the U.S. trip.

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The risks facing China of slow growth and a bubble economy as the new leadership of Xi Jinping takes over in 2012. The export model for the economy is coming to the end of its run and the new leaders have to come up with a new plan for the future. At the same time they face the interests of state owned companies, banks and local governments interested in maintaining the status quo.

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Robert Reich, a former Labor Secretary, says that instead of "rebalancing" with Chinese consumers buying more American goods and China exporting less to the USA, things are headed in the opposite direction. Why? Because at the macroeconomic level China is devoting more of its country's resources to production capacity. Chinese consumers are taking home a smaller proportion of the total economy. In 2008 personal consumption amounted to 35% of the total economy, whereas in 1998 it was 50%. Capital investment in the same 10 years went up 35% to 44%. Chinese continue to save and these savings are going into infrastructure and manufacturing capacity. There is even a social twist to the savings, with fewer young Chinese women than men parents with boys have to compete in the marraige market and save assets for this. Households are also saving to support more elderly people as population is aging quickly with population policies. All this means that with all the talk (see links to Niall Ferguson and Krugman), the situation will likely roll on in this manner till things reach an impasse, or there is a strong political backlash in the USA which leads to stronger trade actions by the government, or there is a crisis. Meanwhile the trade deficit is headed higher and Chinese foreign reserves will go far above the current $2.3 trillion. And the Europeans will also be getting restless with their trade imbalance, as the euro edges higher and the yuan remians pegged to the dollar, leading to trade distortions. ...

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GM will invest $3 billion in electric car production in Michigan. The Orion Assembly plant near Detroit  will produce electric pickup trucks- renovation costing $2 billion and bringing 1500 jobs. A new battery cell factory near Lansing would bring $2 billion in investment in 50-50 joint partnership with LG Energy Solutions creating 1200 jobs. Ford is investing in other states, with $11 billion investment in building 3 battery plants- 2 in Kentucky, one in Tennessee near Memphis. Tesla is investing in Austin, Texas. GM says it is revamping existing factories to save $10 billion through 2030. The new GM investments are part of $35 billion in spending on electric cars through 2025.  For the US as a whole these investments change the look of the auto industry from one that in the past put factories in China and Mexico for gas and diesel vehicles. The shift to electric is now being taken as an opportunity by the Biden administration to encourage auto companies to make a new beginning and speedily build the future electric car base in the homeland itself. So that American workers and families come first in the great American tradition. ...

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Prakash and Ghosh in the Hindusthan Times remind readers that even though India has ambitious plans for renewable energy much remains to be done in shifting to clean coal technologies. An estimated 80% of India's coal plants use obsolete technologies, making this an obvious area for improvement. India plans to make solar the source of 100GW of 175GW it plans to generate in renewable energy by 2022. Yet it must not be forgotten that coal is a dominant source for the foreseeable future and shifting to clean coal technologies is an area that should get top priority from the government. Today India is the third largest in terms of carbon emissions after the U.S and China.

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Japan says Russian planes intruded into Japanese airspace for over 1 minute on February 7, 2013, over the island of Rishiri, near Hokkaido. F-2 aircraft from Japan's Self Defense Forces responded to the intrusion. The intrusion comes at the time of the Northern Territories Day when Japan's government reiterates its determination to press for return of the Northern Territories from Russia. Japan did not sign a peace agreement with Russia at the end of World War II after Russia refused to leave the islands. The islands are known as the four Kuril islands in Russia. Policy experts at Japan's National Graduate Institute for Policy Studies say the Russian intrusion was an attempt to test Japan after an incident where Chinese radar locked in on Japanese naval ships in the East China Sea. The effects on public opinion are likely to create support for prime minister Abe's effort to increase the budget for Japan's Self-Defense Forces.

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Japan's situation, a strong yen and a stagnant economy, continues in 2010.

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Concern about slowing growth in China with rising inflation. The problem of opaqueness of the financial system and of banks that are both listed companies and run by the government, and how this could accelerate a slowdown at some point with accumulated problems in the financial system. A sense that China's growth model has reached a limit, and whether there will be a soft landing.

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The new generation of Communist party leaders that takes over from Hu Jintao and Wen Biao. Chongqing region's party chief, Bo Xilai is one of the leaders expected to be part of the senior communist leadership, along with Li Keqiang as prime minister and Xi Jinping as president. Xi and Bo are sons of communist party veterans from the Long March. Chongqing was the main base of the Communist party in the 1930's and 1940's, as Mao and the communists fought the Nationalists and then the Japanese. Bo has suppressed the influence of Mafia elements in the region, and is campaigning for a place on the Politburo's Standing Committee with a call for a return to Maoist values of "conscientiousness." Chongqing's state companies are supporting a project launched by Bo in 2010 to build 800,0000 subsidized apartments in 3 years, with an investment of $18.5 billion. This comes as income and wealth gaps in the country are widening and housing is becoming increasingly unaffordable for ordinary wage earners....

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Average land prices in China in October 2011 are down 40% from the peak in Sept. 2009, when real estate companies purchased large amounts of land. This means large losses for companies that bought when prices peaked. When this happened in 2008 companies were rescued by the large Stimulus by the Chinese government. It is uncertain what will happen this time as a similiar Stimulus effort is not expected. Prices nationwide for residential land were down 8% in October from the prior year, and transaction volumes were down 37%, according to property firm Soufun. In October and November 2011, land auctions at a number of major cities in China failed, with either no bidders or low bids. According to CLSA property analysts, China Overseas Land & Investment Ltd. and Longfor Group have reduced prices of homes by 20% -25% for projects in Shanghai.

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An account of the education, influence, political and economic positions of sons, and grandsons of the Communist leaders under Mao-tse-tung from the 1940's and 1950's. This story by Jeremy Page covers Bo Yibo, a veteran Communist leader under Mao, his son Bo Xilai, party secretary in Chongqing, Politburo member and candidate for the Politburo standing committee in 2012, and his son Bo Guagua, a graduate student at Harvard's Kennedy School of Government. The salary for aminister is said to be 140,000 yuan or $22,000 a year. Yet because of the power and economic influence of the Communist party leaders and their offspring, and the state run economy, a great deal of wealth and influence is controlled by this group. In 2010 an internet account described the son of a former vice president buying a $32.4 million harbor-front mansion in Australia.