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Xi Jinping's childhood years were spent during the Chinese Cultural Revolution. He studied for a degree in chemical engineering after the end of the Cultural Revolution. He belongs to the group of leaders who worked to form the consensus around the current leadership and the leadership of Jiang Zemin. Little is known of his views on many issues.

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Wang Huning, who has shaped the policies of three Chinese presidents, was a professor at Fudan University in Shanghai, before beng selected by president Jiang Zemin in 1995 to join the Communist Party of China's Central Policy Research office. The Policy Research Office provides research and guidance on foreign and domestic policy to China's leadership body, the Politburo. Huning was dean of the law school at Fudan, and head of its international politics department. He studied French at a foreign languages school during the Cultural Revolution upheavals in China, before going to Fudan University in 1978. Xi Jinping, the current president, was sent like many other Chinese leaders to work on a farm in the countryside during that period. In that same year 1978, Li Keqiang, the current prime minister moved to Peking University, after taking the first university entrance exams in 1977 following the Cultural Revolution. Li studied western constitutional law, later focussing on urbanization for his postgraduate work. Huning studied in the U.S. in 1989 and is familiar with the American system, western concepts of government and economy. His specialization at the international politics department was in comparitive politics- the systems of government of different countries- and he is seen by experts as having been a key influence in defining China's path making move to build a market economy under public ownership, seeing it possible for the two to work together. In 1991 Huning published "America Against America," critiquing the American political system and pointing out that in American democracy major economic decision making powers still rested mainly in private consortiums, with this acting as a constraint on political democracy. These ideas gradually evolved into ways to manage China in a world with alternative systems and political history. For Huning the question facing China was one of of finding its own workable model based on its history and experience, and need to manage the transition to a modern economy in a stable environment. Huning is now part of the Politburo and a candidate for a seat on the Standing Committe in 2017. At 57, he is expected to be part of the leadership for the next decade, having helped three presidents shape domestic and foreign policy, setting the direction for China's transition to a modernized economy and a political system that accomodates the needs of a new generation....

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China's current account surplus has declined to 2.8% of GDP for 2011 from about 10% in 2007, and will be around 2.3% of GDP in 2012, according to IMF estimates. The U.S. current account deficit is down to 3.1% of GDP from 5.1%. By controlling the exchange rate China was able to keep the competitiveness of its exports, resulting in a five fold increase in exports from 2000 to 2010, according to the IMF. The decline could be temporary say experts, as the the recession in Europe and the U.S. resulted in slowing exports, with its infrastructure buildup sucking in imports of machinery and other goods from the western countries at an accelerated pace with its 2009 stimulus measures. Another reason is that in the last decade China has developed its own high tech and other companies which will now increase exports. IMF forecasts show a pickup in China's trade surplus to 4.25% by 2017. This could be lower if the renminbi is allowed to appreciate. Estimates of appreciation of the renminbi are 8 percent in nominal terms since June 2010 against the dollar. Including inflation, which is higher in China, the renminbi has appreciated by 13% since June 2010. ...

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Apple appears to have peaked and it marks the end of an era. Americans have more to be concerned about than the latest incremental iPhone design with decline in reading skills among children, dropping mens college enrollments, cost of living crisis, and retiree poverty.  For the most part US prices are kept at last year's level as Apple is facing new competition and restrictions in China, with a new Huawei phone which matches the new iPhone. Apple has increased iPhone revenues by 44%, even though shipments have increased by 15%, with aggressive pricing, making iPhones generate $40 billion, 50% of total revenue. This aggressive pricing phase may now be ending as Huawei plans to increase global shipments by 20% even as the total smartphone market declined by 6% to 1.15 billion shipments. Apple has 55% of the US smartphone market and worldwide at 27%. This may be the peak and the end of an era in which Apple and other Tech companies not paying a fair share of taxes led to the defunding of infrastructure and public services. ...

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A Sept 2012 Census Bureau report shows the median income of a typical U.S. family declined or was flat in almost all states in 2011. Median household income declined in Nevada by 6%, in California by 3.8%. In Arizona and Florida incomes declined by 2.9%. For the U.S. median income declined by 1.3% to $50,502 in 2011. Poverty continues to increase, with California showing 335,760 people falling into annual income levels below $23,021 for a family of four in 2011, giving the state a 16.6% poverty rate.

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This editorial in the Economist says China faces risks of a steep fall in the currency in its management of the currency. It suggests temporarily using capital controls to stabilize the currency and later gradually lift the controls. In any case it says the exercize will not be painless because of high debt of companies and in the Chinese economy.

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Malpass call sfor astrong dollar policy as the way to prosperity for the US, at atime when other countries are looking to promote domestic consumption for growth by having stong yen in the case of new Japanese policy and a stable but stronger yuan in the case of new Chinese policy. With high levels of debt is easier for the US government to let a weaker dollar reduce the size of its debt, but ith has other bad consequences in promoting jobs and growth in the domestic economy.

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David Brooks says the Paul Ryan Budget proposal is a bold step forward that is badly needed in this debate on health care, even though it has some grave weaknesses which need to be corrected. It is a bold step forward because he says Democrats say they want no middle class tax increases, or are not willing to say what kinds of tax increases they support, and yet they believe the Medicare and Medicaid and Social Security programs are worth preserving. This is'nt based on reality. He cites the weaknesses, beginning with the one discussed in David Leonhardt's column in the New York Times on April 7, 2011. Too many Americans pay too little into Medicare taxes and expect to collect several hundred thousand dollars more in Medicare benefits. The example given in Leonhardt's column is from a study that shows 56 year olds with average earnings pay about $140,000 in dedicated Medicare taxes over a lifetime, and then go on to collect $430,000 in benefits. Middle class and affluent boomers can't get off paying their share like everybody else. Its just the right way for their children and the nation's children. Ryan's plan excludes older people reaching retirement in ten years. The other major weakness is that the cuts are too deep. Things like the Pell grants which Ryan proposes to cut back to 2008 levels need to be preserved, and more money has to go into science, education and research and early childhood education for the U.S. to be competitive with China and India. The Ryan proposal places cuts that would be required so that tax revenues need to be at 18% of GDP. The number where a larger consensus exists is for tax revenues at 20% of GDP (also supported by business and the Wall Street Journal's editorial columns). This would preserve programs that are most productive for the economic future of the U.S. Ryan's proposal lets the hope for reducing costs of medical care rest entirely on future retirees deciding how much medical care (tests, procedures etc) they consume through larger cost sharing. Yet a structure and framework is needed to manage these costs effectively, and some combination of incentives to retirees to control costs and an effective structural framework is needed. ...

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The dollars situation may not be as bad as it looks. There are signs that the dollar is strengthening against the British pound and the Australian dollar and other important currencies. And the weaker dollar is already working to reduce imbalances in America's trade deficit. There are two aspects of the dollar's role, one is as a means of international exchange and the other as a store of value. For the first reserves of any country need to be highly convertible and America offers highly liquid markets and this has not changed. As a store of value the dollar has lost some of it value especially against the euro. But the reason that the dollar should not see a sudden drop in value is because the largest holders of dollar reserves China with $1.4 trillion and Japan with $1 trillion would stand to lose by shifting out of dollars significantly at atime when the dollar was so undervalued besides hurting their export markets if it affected the US economy. And though the euro looks good in the short term, over the longer term Europe's aging societies may see lower growth and the future may look different once the USA has corrected some of it imbalances which is precisely what the weaker dollar accomplishes as the US exports start humming. Seen against the historical background the USA has periodically gone through this situation with dollar weakness in 1977-79, 1985-88, 1993-95. In 1985 the dollar went to 81 Japanese yen and there was concern about its reserve currency status at the time. However the dollar has weathered these storms. And there is always the option for a country to peg its currency not to one currency alone but to a combination of the dollar and the euro. This was the case before 1914 when 3 currencies the British Pound, the French Franc and the German Mark were used. In the post 1918 environment the dollar replaced the German mark alongside the Pound and the Franc. The Persian Gulf countries have this option so they can use their own monetary policy to control inflation by pegging not just to the dollar but to a basket of currencies as Kuwait has done. See the link to the Persian Gulf countries handling of this currency issue in WSJ, November 20th and Nov 1, 2007....

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Chancellor Merkel meets President Trump in a key summit in March 2017. The two leaders have different styles, one flamboyant the other reserved. Chancellor Merkel tells the German media "it is better to talk with each other than about each other." Trump called Merkel's refugee policy "catastrophic," Merkel has said that the Geneva convention requires countries to do this on humanitarian grounds. On trade German's Economy minister Brigitte Zypries says Germany would file a suit on any hike in import duties at the World Trade Organization, that WTO rules restrict import taxes to 2.5% on autos. Germany's BMW plant in the U.S. exports more autos than GM and Ford put together, and Merkel is likely to emphasize large German investment in the U.S.. The heads of BMW and Siemens and other industry executives are accompanying Merkel to the U.S. as trade will be a key topic.

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GDP expanded at 3.5% in the fourth quarter of 2016, according to the Turkey Statistics Office. This follows a contraction by 1.8% in the third quarter of 2016. For the full year the GDP growth is 2.9 percent, a decline from the 6.1% in 2015. In 2015 Turkey gained from lower oil prices. This was offset in 2016 by the politics in the region- the increased instability in the country following a crackdown on the opposition and media, internal conflict in the Kurdish region which appeared for a time to be leading to peaceful settlement. As a result tourism revenues declined by 30% and this was offset by increased government spending. The uncertainty before the referendum also leads to decline in foreign investment and investment by domestic firms.

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China's ginni coefficient at 0.5, has changed from 0.3 several decades ago, according to Li Shi at Beijing Normal University. A level above 0.4 is considered socially destabilizing. 150 million migrant workers from rural areas are denied access to benefits such as health care, education and pensions which are provided to urban residents. Migrant incomes are also affected by rising food prices. Estimates of per capita income are $935 a year for rural areas, up 13% in 2010, and $2,965 in urban areas, up 10 % in 2010. An economist at the National Economic Research Institute in Beijing says the income gap is understated because the incomes of families in the higher end are understated.

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China expands the trading range of the yuan to 1%. The yuan is set by the People's Bank of China, China's central bank, at 6.2879 yuan per U.S. dollar on March 14, 2012 or 15 to 16 U.S. cents to the yuan. The yuan rate is set daily by the PBOC, called the parity rate, and was previously allowed to trade in a 0.5% trading range.

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Toyota's goal is to remain the preeminent automobile manufacturer in emerging markets and the IMV is part of its strategy for achieving this goal. The IMV series for emerging markets, with one million in manufacturing capacity coming off a single platform to lower costs, is designed to meet local needs from a price standpoint and rough road conditions. Sales of one million off of a single platform is an achievement only Toyota will have achieved. A minivan, a sport utility vehicle and 3 pickup trucks are all made from a single chassis, with localized production since 2004. The IMV series is expected to account for 10% of the 9.58 vehicle sales goal for 2012. CEO Akio Toyoda plans to increases sales in emerging markets to 50% of total sales by 2015, up from 40% in 2011. IMV vehicles are made in 11 emerging market countries- in Argentina, India, South Africa and Thailand, and are sold as the Hilux pickup, the Fortuner SUV, and the Innova minivan. Over the years Toyota has transferred more of the design and development to emerging market countries to meet local preferences and reduce the effects of a strong yen, leaving only core components to be designed and manufactured in Japan. As it recovers from supply disruptions due to floods in Thailand and the tsunami in Japan, Toyota is planning on sales of 9.58 million in 2012, a steep climb of 21% from the 7.95 million sold in 2011....

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O'Malley, Sanders, and Clinton emphasize the issue of wages, income disparities, rising inequality, and a shrinking middle class in the first Democratic debate of the U.S. 2016 presidential election. Clinton points out that "at the center of my campaign is how we're going to raise wages." Sanders says that "the middle class of this country for the last 40 years has been disappearing." Clinton points out her opposition to the Trans Pacific Partnership trade agreement because it does not help raise American wages. Clinton calls herself a progressive, but "a progressive who gets things done," and a moderate when it comes to getting things done. Sanders points to the "deep injustice, an economic injustice that threatens to tear our country apart, and it will not solve itself." Sanders points to the wealth concentration in the U.S. "with the top one tenth of 1 percent owning about as much as the bottom 90 percent, and 57% of all new income going to the top 1 percent." Clinton comes to Sanders defense on the issue saying "it's our job to rein in the excesses of capitalism so that it doesn't run amok and doesn't cause the kind of inequities we're seeing in our economic system."...

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China's GDP growth for the 4th quarter of 2012 was 7.9% over prior year, increasing from 7.4% in the third quarter of 2012, according to the National Bureau of Statistics. GDP growth for 2012 was 7.8%, down from 9.3% in 2011. Growth is stabilizing at 8% which shows China is managing the economy, slowing the growth rate with a smaller stimulus planned in 2013, and working on sustainable growth for the longer term. This is a significant positive as a new leadership takes over in China and sets priorities for stable growth, and improvements in housing and health care.

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Sales of passenger cars in India have increased from 675,000 in 2002 to 1.4 million, with 200,000 exports. The study by IBM and the Transportation Research Institute of the University of Michigan forecasts that sales in India of passenger cars will double again by 2010 to 2.8 million and reach 4.2 million by 2015. Auto loans are more prevalent in India with banking consumer credit better established than in China. The minus side is the bad condition of roads which will take a lot of resources and effort to fix but is likely to be accomplished in te next ten to fifteen years. One advantage for the auto industry is that the government fully supports the auto industry and even has a plan with targets to be achieved by the auto industry. With manufacturing lagging behind in India the hope is to build a manufacturing base for automobiles and auto parts that will generate jobs and expand manufacturing capabilities.

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U.S. Commerce Secretary, Wilbur Ross, has balanced the rhetoric of president Trump on trade in the NAFTA debate by saying the U.S. is looking for win-win solutions in trade relations with Mexico. At the WSJ CFO network Ross says the trade regime from the post war years is now an anachronism and does not work well especially for the U.S. Many experts agree that the trade framework from that period is problematic. It does not take into account, for instance say experts, the situation where a command economy such as China could help manufacturing industries with state policies, including currency policies. The rapid growth in China was different from the rapid growth in an earlier period of Japan, in terms of its impact say experts. The U.S was the dominant economy during the sixties, and the growth in Japan was not at the accelerated pace and of the magnitude that happened in China. As a result the impact on  some communities in the U.S. was much more intense in the last two decades, as documented by prominent trade studies, leading to the sense that trade did not work for these communities. ...