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Greater awareness in Europe and the US that a global minimum corporate tax rate is needed for fair burden sharing to renovate decaying infrastructure. US president Biden takes the lead and France says it will follow. 

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The slowing of China's growth with GDP growth for 2012 estimated by the government at 7.5%. Growth was 8.1% in the first quarter of 2012, with expected decline in the second quarter. In response China's National Development and Reform Commission, which executes economic policy in China, has accelerated the approval of major infrastructure investments starting in April. This includes hydropower stations, clean energy projects, 4 new airports and renovations of 3 large steel plants, a subway in Nanjing. The investments total about $150 billion. Another stimulus comes from investments by local governments with central government support, including highways, sewage treatment plants, and $55 billion investment by state corporations in the Chongqing municipality. To revive the auto industry a cash-for-clunkers program is also planned, and this may include cash incentives for home appliance purchases. In addition to this the State Council headed by premier Wen Biao is making plans for 20 major projects in 7 strategic industries, from advanced equipment manufacturing to energy conservation. The result is a Stimulus that will be much smaller than the $585 Stimulus spending of 2008-2009, with a measured response compared to the earlier splurge in spending. Experts say the Communist party sees this as ensuring a smoother transition to a new president and prime minister in 2012, with added credibility for the nations growth and for the leadership of the Communist party in the modernization drive. ...

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The language and tone of the leaders says something about what is likely to be the outcome of the G20 summit. Its a first for significant participation, as countries as diverse as Russia, China, India, Indonesia, Saudi Arabia, and the Netherlands are represented. The credible positions of both sides, the US, UK and Japan, and the European side of France, Germany and the Czech Republic, well presented, provide for some serious discussion and negotiations. France's Sarkozy and Germany's Merkel want to see a global regulator that would reach inside the borders of the US with stricter regulation. Sarkozy calls this "nonnegotiable." And he said that he would reject an agreement that puts off stringent new regulations on banks, tax havens, and hedge funds. He said "the compromise has to come from all countries around the world." US President Obama said that if there is going to be renewed growth it can't just be the US as the engine, everybody is going to have to pick up the pace," at the same time saying that the US had to be concerned about its own deficits. The fact is that the US stimulus will mostly help a severely impacted domestic economy recover with social safey net payments to local and state governments and unemployment insurance, as well as targeted investments in infrastructure, education, energy and health care. It will not mean anywhere near the kinds of imports the US made from other countries, especially China. And Obama made that clear when he said the US will never return to that situation, where the US had become a "voracious consumer market." For the Germans the major market for their middle companies is China, and China has its own stimulus spending on infrastructure spending, which should provide for continued imports of machinery from Germany at a much lower level. Thus Germany and France see a strong tendency to call the source of the crisis and repeat that call till the US listens, and refer to the failure of free market capitalism in its unregulated form. And to insist on fixing it through a global regulator with strict and systemwide rules. So you hear this in Merkel's words, "the foundation for this finacial architecture must be laid now, that is why we seem to be so tough." While the vivacious Sarkozy talks of compromise, and a US gesture in regulation in return for Franc's gesture of joining NATO, the mild mannered Merkel is clear and focussed about her concern. She rejects the idea of linking stimulus spending demands of the Anglo-Americans with the Franco-German demands for global systemwide regulation. "This is not a bargaining chip," she says. The media may mistakenly report lack of consensus as a failure of the summit. But in the long run in the presence of good positions on both sides, it could lead to some tough negotiations even if continued at another meeting. And result in something serious, credible and lasting in its impact, rather than something that was easy and did not in Andy Grove's useful words involve "constructive confrontation." ...

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Rick Rieder of Black Rock and David Kelly of  JP Morgan Chase and others sense that the US is entering a phase they call "the satellite economic phase in which there are no crash landings and takeoffs but steady orbiting in space. Less boom and bust and more steady growth for years is the new economy Biden is creating with huge investments in infrastructure and manufacturing and worker skills training that upgrade the workforce. Investments in health and education are part of this. This makes the US economy more resilient with government working both as a partner and agencies of the government that regulate and provide the rules for fairness and level playing field acting to prevent the booms and busts of the past such as the 2009 financial crisis and other crises. With China, EU, India, Japan+South Korea and the US, all 5 of the largest economies aligned to maintain steady growth for their people the prospect of war acting to reduce growth potential will also be managed in a setting that is needed following the pandemic. This will make both the Middle East and the Eastern European recurring crises to be toned down and a shift made to growth in these regions from the war ravaged periods of reckless behaviour of nation actors. This is a view now emerging among key people in the US economy such as Rieder Black Rock and Kelly JP Morgan. Both says the ways of understanding this and the terminology "soft landing" or "cylical, midcycle" are now outdated and no longer apply. Says Reider-“But one point to keep in mind is that satellites don’t land and maybe that is a better analogy for a modern advanced economy” like the United States.  ...

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Sardesai gives reasons for the collapse of the BJP alliance with PDP in Kashmir. He says the differences were too great between Jammu and Kashmir regions of the state and they were never bridged at the local level. The hope created by the 2014 election in Kashmir have diminished from a lack of effort on both sides. As the violence escalated in the state and with approaching elections nationwide in India in 2019, the BJP decided it would be better positioned for the election not being part of a failing government in Kashmir.

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With Labour leading in polls Mr. Johnson faces a no confidence motion in parliament after 53 Tory members called for the motion. No elections are planned before Jan 2025. There are no choices for the Tories other than Mr. Johnson who could hold his broad coalition of working class districts in the north of England and affluent districts in London. Mr. Johnson has also taken England through the pandemic, vaccination drive, and pandemic aid programs to help the UK recover, which he reminded Tory members of parliament.  The partygate scandal refers to parties that Mr. Johnson says never happened but took place during the worst part of the pandemic which have created an impression of callous behaviour and disregard of rules. The Conservatives face another problem in that the US and the EU including countries such as Denmark, Germany and France are moving in a direction that favors leaders who are promoting a revival of manufacturing locally, creating local jobs instead of job shifting overseas, increasing minimum wage, and promoting interests of workers and families. Labor had lost credibility during the Blair years similar to SPD losing credibility during the Schroder years, France's Socialists losing credibility under Hollande, and the Democrats under Clinton-Obama, and a general loss of credibility of socialist leaders who failed to work for the interests of workers and families. Biden, Scholz, the German Greens under Habeck, and French under Melenchon are changing this today wtih a new and genuine commitment of respect for the dignity of workers and families, and women. There may be a sense of unease among Tories about how long the working class districts in the north of England will vote Tory when no investments are being made to fulfill the promises Boris Johnson has made. Yet Tories have no alternate leader and may be stumbling their way into the remaining part of their period in office as Britons look for a new future where the massive investments needed in manufacturing locally and in infrastructure take place to benefit workers and families. ...

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As many politicians and commentators deride programs by the government in the infrastructure area as " mere spending programs", Robert Frank, an economist at Cornell and NYU offers some much needed clarfication. High savings rates are not bad for the public, savings go into investment int he economy, and higher savings properly channelled can lead to higher productive investments that in turn generate a virtuous cycle of more investments. There is thus no conflict between private savings and economic growth. China's and India's higher savings rate leads to savings going into investments in the economy for higher economic growth. Only in sharp economic downturns does the paradox of thrift operate, here lower consumption leads to lower production and layoffs, and the economy goes into a tailspin as consumers hoard their cash and postpone purchases. There is an element of fear in that kind of downturn. So its aunique animal. With the government stepping in to provide investment, make up for jobs lost, and restoring confidence, the paradox of thrift does not operate. ANd its ok and desirable to have consumers save especially when they are so overstretched as they are today. A real world example is that much of the US credit card debt is at 20% interest rates or more. In just 5 years says Robert Frank each dollar invested in reducing debt would support more than $2.50 of additional consumption, in 10 years more than $6. Savings matter. The wastefulness of spending is not a given. It depends on where the government is spending. If there are productive investments like infrastructure that are waiting to be made, then with some due diligence and care the investments can be very efficient....

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Brazil's currency, the Real, moved up to 1.7 per 1 US dollar, on the eve of the Presidential election in the first week of October 2010. Brazil's overnight interest rate of 10.75% attracts speculative foreign capital in the carry trade, where investors boorow cheaply in the US and Japan and invest it in Brazil. The central bank has kept these rates high to finance a current account deficit of $46 billion in 2010 -which is forecast to hit $60 billion in 2011- and to finance a high level of government spending. This spending is likely to continue with Ms Rousseff as the new President, as Rousseff plans to invest in infrastructure such as bullet trains and river dams, as well as the FIFA world cup and the Olympics. Government spending has increased by 18% so far in 2010. Exporters are affected by the artificially high value of the Brazilian real. Goldman Sachs economist, Alberto Ramos, says the real is overvalued by 55% compared to its fair value of 2.65 to 1 US dollar, based on a computer model that incorporates factors such as trade, inflation and productivity. Sao Paulo is already the most expensive city in the Americas, according to one survey....

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France is moving quickly with spending on the $37 billion stimulus. Public buildings, museums, cathedrals and historical sites are being renovated in 2009. About 50 chateaus, and 75 cathedrals are part of 100 million euros for cultural centres. About 75% of France's stimulus money will be spent in 2009, in contrast to the slow work in the USA.

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Paulson to visit India to promote US interest in India's infrastructure development.

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This is huge- for Germany, for France, and for the European Union. After initial hesitation and a decade of not looking ahead, Germany under Angela Merkel is finally not just looking ahead to its vision for Germany but doing this as a part of the larger European community. And the European Central Bank after its initial lack of community spirit, is paving the way with its own actions for the Europe wide recovery with a significant increase in lending to EU countries.  Germany's finance ministry has agreed to spend 130 billion euros on more than 50 initiatives to promote growth in Germany. No longer is the government looking at the car industry as it did in the past. It is looking beyond to what Merkel calls the "profound upheaval" coming from climate change and digitisation. For Merkel after the changes caused by the pandemic something more had to be done- "We just could'nt introduce a traditional stimulus package. It had to be done with an eye to the future, so that is what we especially emphasized."  This also brings together France's Macron and Germany's Merkel in a combined effort to bring Europe up to face the future with confidence. It is amazing how the pandemic has changed minds in Europe. From the long drawn out period since 2008 when traditional policy ideas and austerity thinking prevailed, to the idea today that this is no way to face the future with confidence for Europe to be back on its own feet, for hope to return. Instead of partnering in austerity with the Dutch and the Swedes, the finance ministry is now looking to France, Italy and Spain, considering the common pain of the core European countries during the pandemic and looking to the future.  Merkel moved to circumvent the traditional Bundestag's refusal to permit debt sharing  across the euro area by producing 500 billion euros of grants for hard hit businesses across the European Union. As Macron says it was a necessary  step- " What is sure is that this 500 billion euros will not be repaid by the beneficiaries.... We are proposing to do real transfers (of money) ... that's a major step." Forecasts from Capital Economics and other forecasters show the European Union's major economies of France, Italy and Germany rebounding quickly in 2021 after the blow in 2020, in a V shaped recovery with growth of close to 6% in France, and higher in Italy because of the bigger hit taken there than Germany. The strong U.S. jobs report with addition of 2.5 million jobs for May shows that the rebound can be sharp upward swing if the policy, will and community spirit is summoned up by leaders and people, no matter what happened in the past decade. It is also based on having the right spirit that knows about investing where it really counts for the people - in infrastructure, health, public services, and avoiding the misallocation of resources and spending that happened before. ...

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Saudi Arabia which was seeing GDP growth of 4% a year is slowing and should see GDP growth at 2% in 2009. Overall Saudis are in much better shape than their cousins in the United Arab Emirates like Dubai and Abu Dhabi. THis is because the Saudi banking system followed conservative practices and parked its $500 billion in foreign assets in US and European government bonds. Saudis can use these funds to increase infrastructure, education and healthcare spending by an estimated 10% this year to about $150 billion. At the samt time the Saudis will have to pull back from the $600 billion of megaprojects that were planned and will have to put more government money in projects that do go ahead. There is likely to be a hold on the projects to build a number of new cities in remote parts of the country. Some like the King Abdullah Economic City planned for the Red Sea coast may get the go ahead.

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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On the first day of the new vaccine policy on June 21, 2021, India has vaccinated 6.9 million people. India has now vaccinated 287 million people out of a population of 1.2 billion. This is a race against time as new variants caused the second wave of coronavirus in April and May of 2021 with cases peaking at over 300,000 a day.  The shortcoming of the old vaccine policy are being corrected. The entire vaccine supply process and the vaccination drive is now being handled by the federal government. Earlier during the second wave vaccine supply and the vaccination drives were under an arrangement with no clear overall responsibility. States shared responsibility with the federal government and target vaccination goals were missed, vaccine supplies were inadequate.  A similar arrangement in Germany failed and Germany's vaccination supplies were inadequate and vaccination drive stalled. This caused immense frustration in Germany in April-May 2021. Germany's troubled history before World War II led to a reliance on decentralized actions, and state governments imposed different rules in a relatively small country compared to India. This was corrected with the federal government taking on the entire responsibility for the vaccine supply and vaccination drive leading to good results today in vaccines. With India's huge population and political process of different state governments, some lacking experience in administration for a complex process, and others failing to coordinate well with the federal government, the lack of overall responsibility at the federal government posed serious risks of missing targets for vaccines and letting the coronavirus wreck the economy and public confidence. Complex negotiations with other governments in Europe and the US for vaccine manufacture in India could only be handled at the federal level. The resources and planning at the federal level were already in place in India for infrastructure and other projects, experience and setting targets in that area at the federal level could now be transferred to this task in vaccines. Somewhere in the range of 8 million vaccines a day need to be reached and sustained from August to December 2021 for India to reach the goal of vaccinated all 1.2 billion people ahead of any further attack from a third or fourth wave, say experts. This is not a choice for the federal government, it is simply something India has got to accomplish to be a healthy nation that can grow with neighbors in Europe, the US, Australia and Japan and build confidence in its Asia-Pacific region. The entire Asia-Pacific region has a lot resting on how well India achieve this goal and moves on to the next phase of assisting its neighbors in the region.  ...

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This report in the NYT looks at the support for the AfD stalled at about 11% nationwide but closer to twice that in East Germany where years of neglect have led to voters shifting to far right parties. The view is presented that there is a core hard right of 10%. Yet it ignores or prefers to overlook what happened in the east which provides the real clues to what happened, so that future policy could be designed to address social goals in a way that never happened in Germany. This is in line with developments in China where president Xi is addressing social goals after years of tech and infrastructure expansion that neglected rural areas and urban poor. It is in line also with the same action taken to address social goals in US president Biden's $3.5 trillion workers and families plan. Social Democrats under Mr. Scholz and a younger generation represented by the Greens have the same challenges facing them to come up with the plans to correct these problems in Germany and with a plan designed for the neglected eastern part of the country. Helmut Kohl pushed for reunification of Germany. With the collapse of the Berlin Wall the momentum was set for this to happen. Yet looking back over that period since 1990, German chancellors and administrations for three decades from both CDU and SPD have failed to invest and create opportunities in eastern part of Germany. It makes German reunification an empty concept looked at from outside. The previous administrations including Kohl and Merkel relied too much on market capitalism to do what it has been shown not capable of doing- tackling social goals and economic crises, much less  political storms such as creation of GDR following Soviet army entering Berlinin 1945. Much commentary on the issues in east Germany show people there left to themselves after mass migration out of the east to the west leaving older people and pensioners in the east, and a sense of being ignored or forgotten. US president Biden said today in ther UN General Assembly- "Our shared grief is a poignant reminder that our collective future will hinge on our ability to recognize our common humanity and to act together." And he went on to say the next ten years to 2030 "will quite literally determine our futures."  The Social Democrats under Scholz and the Greens under Baerbock and Habeck have to come up with plans and programs that will increase ease of living and opportunities for a thriving eastern part of Germany, after the failures of market capitalism in its unregulated form during the Merkel years and predecessor administrations. ...

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The vast expansion of the Indian middle class takes on a different dimension a few weeks before the election say experts, as India heads into a general election after the India Pakistan conflict in February 2019. This is because national security now has a wider constituency. It could help the incumbent party the BJP with urban voters and swing voters as the issue of security remained prominent in the northern states. In other states where caste and regional politics, farmer agricultural related issues are prominent, this could be less of a factor. Overlooked in this is the manner in which new investments in infrastructure have been pushed forward for rail, road and bridges, and in other infrastructure such as hospitals and universities. The government slogan is that what was once considered impossible is now possible. New metro lines are being inaugurated in many cities including Ahmedabad, Mumbai. The speed with which the Metro in Mumbai is being built, with the head of the project saying it should have been built yesterday, is an example of the urgency given to infrastructure. The government is pushing hard to convey the image that the next 5 years would lead to an infrastructure building boom that it has shown can be done. A recent report in the Guardian shows that China is pouring every 2 years more concrete than the U.S. did in the entire 20th century. This fact drives India under Modi as it heads into the 2019 election, the sense that previous governments had never pushed India's potential for modernization similar to its East Asian neighbors, Japan, South Korea and China.    ...

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In a new twist drugmaker AbbieVie will bring out less costly versions of Humira in Europe where its patents have expired and still keep the U.S. market at higher Humira prices using a thicket of patents. Reports show pharmaceutical drug pricing as a major issue in U.S. midterm elections. Biologic drugs are costly. In this case Humira will sell at a 10-20% discount in Europe. Abbie Vie countered by getting hundreds of new patents in the U.S. to continue selling at high prices.

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The U.S. Government Accountability Office says only $179.5 millon of the first $1.5 billion- in a five year aid program to Pakistan worth $7.5 billion- has been spent. USAID's director for Pakistan, Andrew Sisson, says the $1 billion from prior ununsed funds was spent in Pakistan in 2010. This includes $500 million for aid during the disastrous floods last year. Projects include the Gomal Zam Dam in South Waziristan, at a cost of $20 million. That project helped build a spillway to apower plant bringing electricity to a remote region in Pakistan. That dam was built by Chinese engineers from the Sinohydro Corporation. The Obama administration wants to see large signature projects to which it can point to as signs of success. With a failing economy, corruption and a weak civilian bureaucracy- especially with a weak and ineffective civilian government- getting projects implemented has proven extremely difficult. The U.S. government has committed to spending 50% of the aid money through the Pakistan government and not through civilian contractors with large overhead expenses....

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Efforts to bring the two sides together for ceasefire succeed for Black Sea but hit snags along the way. Russia wanting to get sanctions lifted on it's Agricultural Bank to lift grain and fertilizer exports. A separate deal on not attacking energy infrastructure was negotiated.  Fundamentally NATO needed to be reconstituted at the end of the Cold War. Russia's apparent weakness was temporary as it converted to a market economy from the Soviet model. It's GDP is not a correct representation of it's capabilities and need for respect as an advanced European economy. With US-Russian cooperation nothing like Syria and Venezuelan disasters would have happened disrupting the fabric of American and European democratic systems. Russian conditions include ones that were clear from the early days of the war. Ukraine joining NATO threatens Russian security. That this was not to be allowed. And Ukraine to relinquish territory now controlled by Russia in Crimea and in Ukraine's east. DJT in the US has ruled out joining NATO for Ukraine. These territories have been integrated into Russia and it is unlikely that this would change so that continuation of the war after so many lives are lost doesn't make sense. Europeans particular Baltic Republics and Poland are concerned about Russian intentions- this too is not going to change by continuation of the war. It can be addressed by putting in concrete safeguards. ...

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Tom Keene of Blomberg BusinessWeek talks to a panel of experts about the future prospects for the US and the global economy. The discussion was spurred by Carmen Reinhart's paper at the central banker's Jackson Hole, Wyoming, conference. This paper forecasts high unemployment, low housing prices and very low growth in the US upto 2017. Shiller, Calomiris, Orszag, Kaufman and Bill Gross are part of this panel. Shiller's to do list main item is to get help to local and state governments by restoring general revenue sharing arrangements. Gross would focus on jobs that can hold up in a competitive economy, and put back some of the production that is taking place in the developing countries back into the developed countries, as part of a rebalancing; through a currency realignment. Kaufman would like to see a capital expenditure program by the US government, including infrastructure and education. Calomiris would like to see a setup of a new Republican Congresss to set the stage for post 2012 efforts. Calomiris favors cutting entitlements, cutting payroll taxes, but is not clear how this would help lower the deficit. Orszag points to feedback from business leaders suggesting a lowering of payroll taxes will not spur hiring, as the real reason for not hiring was low 1-2 % expected growth. Shiller, Kaufman and Gross see government efforts as realistically needed in the current situation....

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The Trump administration's early proposal for NAFTA moves away from campaign pledges to completely renegotiate the treaty, instead taking the approach of working to improve the U.S. trade position in relation to Mexico and Canada. It includes seven objectives for tougher rules for labor and the environment favored by Democrats in Congress, and it also has support from Republicans with its effort to update NAFTA for changes in technology and in other areas since the accord was signed during the Clinton administration. The area in which U.S. and Mexican business are wary is one in which the Trump administration still seeks to keep the option of imposing protective tariffs, and a border-adjusted tax to level playing field for differences in taxes, as well as other measures to protect American jobs and interests. Because any renegotiated NAFTA also has to pass both houses of Congress this proposal took into account the different constituencies and interests for this issue. Robert Lighthizer, trade representative under president Reagan is likely to become the next U.S. Trade Representative and lead negotiator. We first profiled Lighthizer in a group in Lyrarc for pointing to the need for a level playing field in trade. As early as 2010 Lighthizer argued in op-ed articles that globalization and trade practices should ensure a level playing field for the U.S., and was covered in Lyrarc. ...

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Poland has a huge shortage of doctors and nurses. The ratio of doctors to every 100,000 of population is the lowest in the European Union. It is twice that in Germany whose relative success in tackling covid pandemic comes from having foreign doctors and nurses treat patients. Consider that the average age of Polish doctors is 53, only a few years from retirement. The situation in terms of immigration reminds pone of East Germany and its depopulation of young people who left for West Germany. Something like this has happened in Poland in health care.  In similar ways other countries in the EU, Hungary, Slovakia, Romania stocked up on ventilators but now have few doctors and nurses left to operate them. It is stretching the limits of human endurance as this report shows in WSJ, with doctors working 36 hour shifts and working 73 hours a week.  Here we see Dr. Rotnicki, who works these long hours at a hospital in western Poland and says that it is like the Second World War, that it is hard times in Poland for health care workers. This report says Italian and British hospitals, not just German ones, are tackling coronavirus with Polish, Hungarian and Romanian doctors and nurses. This report shows that headhunters in Germany drive in to western Poland blanketing windshields with pamphlets promising 5 times more pay, 2 years of free language classes and housing. In Slovakia a third of all nursing graduates leave the coutnry immediately after graduation. In Poland not nursing pay has lagged behind with fewer going into nursing schools. Staff remaining in the region are older and educated under communism when less English was taught, or have returned back home from years overseas. Forcing doctors to give up private practice and work in public hospitals during coronavirus pandemic is not working in Hungary, where surveys find 6 out of ten medical school graduates intending to leave Hungary. These doctors say they are better off working at Aldi and Tesco if needed and making more pay, plus getting weekends off. Poland only recently increased pay for healthcare workers, some even survived on cash given to them by patients. Not a good situation for a country to be in and reflecting the wrong priorities not just in the U.S. and western Europe, but also in eastern Europe, during the last 3 decades. These priorities shifted money away from health care, education and infrastructure priorities. The people simply lost control of their spending allocation to "financial markets" that shifted money in a way that benefited only small group in society neglecting others and national interests. ...

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The South China Morning Post provides this view of China on the day of the 70th anniversary of the Communist Party of China, on the long road from the founding of the government in 1949 under Mao, the Cultural Revolution, and the shift to a state sponsored market economy under premier Deng in the 1980's.  From being at early stages of industrialization to a fully developed modern and industrialized country over three decades.  The challenges China faces are whether its growth will slow with a high debt situation, trade war with the U.S., aging population and the housing bubble that has created problems in Hong Kong. This could lead to a situation where its per capita income stays in the middle range at around $12,000 per capita, referred to as a middle income economy by the World Bank. Some experts believe that the factors that propelled China since 1990- a youthful labor force, globalization reducing tariffs and benefitting from entry into WTO, easy access to western technology, land sales for local governments to finance industrial development, rapid urbanization, and infrastructure investment in electricity rail and highways, are now reaching their limits with smaller incremental steps and growth in the future. The big gains made in the last three decades could be limited by other factors also such as the high debt economy, build up of industrial overcapacity, limited domestic consumption to take the place of exports facing high tariffs. Countries normally face some slowdown in such situation after a period of rapid growth, Japan and South Korea being recent examples. During the transition period to a new kind of economy from the manufacturing export push Asian model many unseen social and other problems emerge. The situation in Hong Kong shows how the housing bubble can also lead to problems that require resources and attention.  There are other social problems that continue to remain hidden. It does not take long for hidden problems to emerge as the situation in Brazil for lack of sanitation and epidemic prevention shows. In China the cost of too rapid development has led to pollution of rivers and land that will need to be cleaned up. The effect of contamination of food supply is an ever present risk with the contamination of land and water. Little attention is paid to prevalence of smoking and its damaging effects on health. The one child policy also brings with it cultural issues of how a whole new generation of children without siblings. Many other social problems that affect the quality of life become evident as growth slows and addressing these problems can actually benefit the country and its people. ...