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What will China look like in the future depends on Li Qiang as well as Xi Jinping. Li Qiang is a close associate of Xi Jinping, as his chief of staff in the early 2000's in Zhejiang province. At that time he interfaced with Chinese companies on investment and economic policies. This WSJ report looks at Li Qiang and how he could be a moderating influence on Xi and provide another perspective for business and economic policy in China. He is seen as having his own instincts on policy, believing in competition, yet deferring to president Xi on broader policy issues for the CCP and China. He replaces Li Keqiang who was sidelined by Mr. Xi as Xi formed his own team from his early days in the provincial governments in China. Some of these connections date back to the early days under Xi's father, Xi Zhongxun, who was one of the leaders in Yenan in the war against the Japanese and the encirclement efforts of the Nationalists against the Communist party local governments in the north during the 1930's. Xi's father was later one of the leaders in the 80's shaping the opening up of China to a market economy under premier Deng- a role not tackled by hardly any of China's leaders from the 1930's. In this sense both Xi's having taken on difficult roles in shaping China's recent history, with the younger Xi building his own team to chart a new path for China. ...

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Three tankers held off the coast of Mumbai by India's Cost Guard have been sanctioned for carrying Iranian oil. India stopped buying Iranian oil in DJT's first term 2016-2020. In his second term DJT wanted India to stop buying sanctioned Russian oil as a way to reduce funding for Russia's invasion of Ukraine now in its fourth year. India has stopped buying Russian oil as part of the goodwill effort to reach trade agreements with the US, EU, and Germany. The seizing of the oil tankers is part of a new effort by India to support bringing Russia to the negotiating table to end the Ukraine war. Russia has demanded Ukraine turn over Donetsk region to end the war, which is a major stumbling block as Ukraine says there are Ukrainians living in Donetsk region. Germany's increase in its defense budget and investment in its armed forces has led to Germany+ (Germany plus UK and France) acting as the chief supporter of Ukraine, after the US has taken more of a neutral stand. The US basically wanting to end the war in 2026 so that the US can address the situation in the western hemisphere with drug and migrant trafficking gangs in Mexico, Venezuela and Columbia, and rebuild its economy to bring back manufacturing from China. For India the guiding principle of its foreign policy is Gandhiji's thinking and advice for fairness and peaceful coexistence - it does not believe in a British inspired NATO expanding on the borders of Russia, and at the same time does not see how a war on a neighboring Russian speaking region is in Russia's continued interest for a fourth year with bombing of energy infrastructure to leave Kviv in darkness. Non -alignment was Nehru's not Gandhiji's idea- the ideas of respect and fairness are basic to Gandhiji's thinking and India will remain true to his ideas in world relations. One aspect of this change in world affairs is missed by all and the media, that is that with the EU and US+ Japan, and India+ Indonesia there is a population of 1 billion of western peoples, and about 2 billion of Asian peoples, for a total of 3 billion people. This is a region three times the size of China, which with its access to capital and technology, labour and good governance is in a position to industrialize and reindustrialize, and bring manufacturing/science and technology to the core of this economic region by 2035. An industrialized India with 2X-3X the size of its current GDP will still be governed on Gandhiji's ideas for world relations in 2047. ...

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Lang Son, Vietnam, in the China-Vietnam border war of 1979. Residents talk of the destruction during that conflict. The VIetnamese government restored relations with China following the conflict. The situation has changed with differences over the South China Sea and drilling rights in the area claimed by both countries.

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China sees the situation in Hong Kong spiralling out of control after two months of protests and leading to a loss of China's sovereignty in Hong Kong. The Chinese official in charge of Hong Kong Affairs in the State Council, Zhang Xiaoming, met with the Hong Kong government representatives in Shenzen and made it clear offering a dire assessment and the most severe since China resumed sovereignty over Hong Kong in 1997 from Britain. Zhang stated- "If the situation worsens further, and there is turmoil that the Hong Kong government is unable to control, the central government absolutely will not just watch without doing anything." He also stated that the central government had enough strength to end the unrest, that the Party center and military force if necessary is behind the Hong Kong government. Wang Zhmin, China's top official in Hong Kong gives a better view of how this is seen in the Party in Beijing. He even called it a "life and death war" comparing it to the "color revolutions" the democratic movements that unseated governments in Georgia, Ukraine and Serbia. China sees this differently than western countries. With its long struggle against colonial rule in the territory controlled by Western powers along China's coastal region, China's ruling party leaders have a very different perception of the situation than is shown in most western media, particularly during the two decades of China's reconciliation with Japan and the U.S. in its effort to catch up. In the rest of the world the perception is very different. The use of a military garrison or riot police from other parts of China would affect China's image carefully built up over two decades of a peaceful developing country working hard to catch up in living standards and technology. As the economy slows to 5-6% the damage would be to business confidence and investment, and to Hong Kong's status as a world financial center. This could also affect China's relations with the U.S., European Union and Britain. with criticism on action by China. Unlike negotiations with Japan by Mr. Lighthizer for president Reagan, when Japan enjoyed a trade surplus such as that of China today (where there were no such issues with Japan as the U.S. had offered security guarantees to Japan), negotiations with China on trade could be affected by issues such as status of Hong Kong. This could lead to a worsening of trade relations, indefinite duration of tariffs and lack of any settlement on trade, further slowing the Chinese economy and hardening positions. ...

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Next five year plan for China calls for more concentration on industry, dominance in key sectors identified by China such as rare earths, and more exports- not less in each of these areas. Chinese Communist Party is very conservative and once this has worked for China it is not going to change its reliance on exports even at the risk of leaving goods unsold in China or oversupply. The result is that the US effort to reduce the trade deficit, trying every tool in the book does not work, leading to an effort to resort to tariffs as a last resort to cut the unhealthy and risky $1 trillion trade deficit China has with the world. Has it worked? WSJ and other reports show that large companies are diversifying their supply channels, only smaller companies without the resources are sticking with China dependence for supplies. The tariffs themselves make headlines yet the US has made careful calculations not to upset relationships with key partners Britain, European Union, and Japan, keeping tariffs low at 10% with EU, and 15% with Japan which exports automobiles to the US to recover some of the years US made concessions to Japan. There are also loopholes on certain products where it is in the US interest to do so. As a result the effective tariff is 10-12.5% not 17-20% shown in reports. Of this 10% what is passed on to consumers is small- as in autos 80% of tariffs are not passed on by auto importers such as Toyota and Subaru because of the higher margins postpandemic. In retail only 30% is passed on again because of the post pandemic higher margins. The administration of DJT has also carefully worked with world oil suppliers to keep oil prices low, lower than in 2023-2024. The result is that inflation is at about 3% in September 2025. The idea that a capricious DJT is doing the tariffs is a myth as careful economic planners including Bessent, Jamieson, Lighthizer, and Luttnick, economic advisors in the Republican party, are carefully articulating the policy with room for DJT's political talk and appeal to public sentiment. ...

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China's military exercises for air and sea blockade of Taiwan raise the political risk of doing business in China says this report in WSJ. It raises the risk level for American corporations such as Apple and Boeing and others, that have large investments in China. The escalating tension and freeze in relations between the US and China is a watershed moment says the WSJ. Looking back years from now it may be the year following the pandemic and the war in Ukraine that tensions took on a level that would lead to acceleration of the building of new supply chains for the US and European Union in Asia that separate from China. The Trump years as president escalated trade tensions and tensions over origins of Covid. The war in Ukraine and China's siding with Russia and forming a "no limits" partnership with Russia have created serious rethinking of the entire relationship from supply chains to defense. US president Biden sees Ukraine's defense as a way of showing that an attack on one country by a neighbor in violation of international law is not acceptable to the US, and particularly in the context of China's relations with Taiwan and the Indo-Pacific countries. In this situation the US is taking the initiative in the war in Ukraine with Gen. Cavoli at US Headquarters in Europe assisting in the effort to repel Russian aggression, and also send a message to China on the importance the US sees in not allowing this kind of violation of international law. ...

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US exports of liquefied natural gas to China surged in 2021 to 17% of al exports. LNG in China's energy mix surged to 8% in 2020 and is even higher in 2021. Facing pressure to peak carbon emissions by 2030, and facing energy shortage in 2021, China is importing more LNG than ever. Prices of LNG have gone up 10 times in 2021 compared to year earlier. China is now the world's largest importer of LNG.

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Both the EU and US see another wake up call from China's position of on again off again diplomacy using rare earth as a bargaining chip. US and China separately and in coordination work to develop policy and actions to secure access to rare earth and technologies that is independent of China. China sees it's action on rare earth diplomacy as robust diplomacy in response to DJT tariffs, yet this is getting the US to move quickly to develop its own rare earth access including working with Australia, and taking action to support US industry. The European Union is not far behind in doing the same. This and the action taken by the US to restructure world trade for a level playing field, and getting Asian partners to acknowledge their abuse of the international trading system for two decades and accept some level of temporary tariffs is changing world trade. The US can regain the position it has held for the better part of the period 1900-2000, overcoming periods that included the rise of Russia and Japan after 1945. ...

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Sharply lower consumer spending is hurting Apple sales in China. Apple cut sales and issued a sales warning in January 2019. This follows Apple's sharp slowdown in India with its uncompetitive pricing.

Retail sales growth in China- which bounced back in previous downturns- dropped to the lowest level in 15 years in November 2018. Auto sales are down with the sharpest drop in 7 years- the first annual drop in sales since 1990. Fears of a housing bubble have led to restrictions on home purchases for speculation which have not been lifted. Income tax reduction has not increased spending. GDP growth for the fourth quarter dropped to 6.4%.

Further signs of a sharp pullback are seen in the drop in consumption tax revenue falling by 61% in October and 71% in November 2018. The consumption tax is placed on cars, gasoline and luxury goods, and is paid by the companies making the products.

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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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As deflation takes hold in China, the lessons of US relations with China that were handled by business to maximize profits that caused climate change and destroyed the environment, and caused deindustrialization in the US show the need for a wiser approach on both sides. Consumer prices in China declined 0.8 of percentage point in January over previous year. People in Hong Kong cross the border to shop in city of Shenzen for lower priced goods. These are the first signs of deflation in China. This is the beginning of a repeat of Japan's experience of the last three decades. Rapid growth followed by unsustainable growth after 2000 in China created problems for the environment and climate change because the growth was compressed into a few years and China's size. The experience of Japan's growth in the 1980's was repeated but this time on a scale that reflects China's population of 1.4 billion people compared to 125 million for Japan. The result many American factories unable to compete with lower costs in China closed in 2000-2015 leading to a general decline in towns and communities across the US destroying livelihoods.The effect is magnified as the support services jobs and wages that go with factory jobs magnifies the effect on jobs by a factor of three or four. The result is a situation that did not have to happen this way hurting both the climate and supply chains, hurting both America and China as business interests in both countries made short sighted decisions. As America diversifies from concentration of supply chain in China, into India and Vietnam, the process needs to be such that it benefits both the American and Indian people not be allowed to be left to business alone to determine as happened with China. This is one of the lessons of this period. ...

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Germany's Foreign Ministry warned in a cabinet note that investment by China's COSCO in Hamburg port terminal "disproportionately expands China's influence on German and European transport infrastructure as well as Germany's dependence on China." Germany handed over a 25% stake in the Hamburg port terminal to China's COSCO shipping with the decision approved by chancellor Scholz. Several government ministries in Germany including the Economy ministry headed by Habeck and the Foreign Ministry have opposed the bid which is seen as having geopolitical aspects as Germany has no stakes in Chinese ports. "On behalf of the Foreign Ministry, I point out the considerable risks that arise when elements of Germany's transport infrastructure are influenced and controlled by China- while China itself does not allow Germany to participate in Chinese ports," said the note from the Foreign Ministry brought forward by Anna Luhrmann, Minister of State for Europe.  China is seen by Germany and NATO as posing security challenges. "In this respect the acquisition of the container terminal does not only have an economic aspect, but also a geopolitical aspect."  ...

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Researchers at MIT, Peking University, Tsinghua University, and Hebrew University, have released a report on the dangerous effects of air pollution from the dependence on coal for energy in China. The report shows that areas in northern China north of the Huai River in central China -where coal use is much higher with government support than the area south of the river- have about 5 years lower life expectancy than areas south of the river.

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US- China trade relations 2025 and XI's rare earth minerals export restrictions response to US tariffs. DJT resonse was 100% tariff on China from 57%. After meeting Xi in Busan, South Korea, after the APEC meetings, US settled on 10% reduction in tariffs from the 57% tariffs on Chinese products down now to 47%. The 100% tariff was withdrawn by DJT and China's Xi settled on withdrawing restrictions on exports of rare earth minerals. The fentanyl tariffs are still in place and the WSJ editorial says not much is likely to happen on fentanyl action by China to stop exports of fentanyl that reach the US through Mexico. China says it will take in soyabeans exports. US signs agreement with Australia to develop alternative supplies of rare earth minerals. The WSJ says for tariffs action to work US should not tariff allies. Yet broad tariffs action was necessary as partners Japan, South Korea, Taiwan and the EU, Canada and Mexico were also nations that created an unfair trade situation for the US. The US took action on all nations that take unfair advantage of free trade concepts to benefit them which also add to the credibility of tariffs as effort to restore fairness in world trade.  ...

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Geopolitical problems and installation of US air defense systems in South Korea led to Chinese restrictions on South Korea. This led Samsung to reduce its labor force in China from 60,000 to 18,000 in 2023. It shifted operations to India and Vietnam. It is Vietnam's largest exporter and makes 20-30% of its global smartphones in India. Apple is only now beginning to shift to India. This is called decoupling or de-risking after an excessive concentration of manufacturing by companies like Apple in China.

Xiaomi took a large share of the local market in China from Samsung, another reason Samsung reduced presence in China. It still gets advanced components from China. In India Samsung has a dominant market presence. Because India is a price conscious market Apple has only a small market share in India.

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This WSJ editorial points out that the current corruption drive in China is opaque and politically driven. Transparency International in its Corruption Perceptions Index shows China at 36 points having dropped by 20 places because of the lack of transparency in tackling corruption. Whistleblower protection should be part of an effecive drive says Transparency International. Also needed is an independent judiciary, free speech and the rule of law, institutions China has still to develop.

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This article in German news service DW.com looks at Taiwan and the threat it faces from China. It looks at different scenarios that might erode Taiwan's status as an independent country. Taiwan's foreign minister Joseph Wu sees the internal situation in China as affecting China's approach to Taiwan. He says China "may find Taiwan a convenient scapegoat" because of the internal situation with floods in China, the economy affected by coronavirus, and other problems.

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The U.S. China trade and tech rivalry continues with the arrest in Canada of Huawei CFO Meng Wanzhou on U.S. request for extradition. The reason appears to be a violation of U.S. sanctions against Iran. President Xi has taken steps in the past to protect Huawei, as a top priority, scuttling Qualcomm's acquisition of NXP Semiconductors NV. The merger with the Dutch Company would have threatened Huawei in its race to dominate 5G networks.

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This editorial says the climate change accords the U.S. reached with China in 2014 amount to little in the way of what China is required to do. China will be allowed to let its carbon emissions increase till 2030, two decades from now, and have the emissions decline afterward. This says the WSJ is what is expected to happen in China anyway because of demographic and urbanization trends. China will also have 20% of its energy come from non-coal polluting sources by 2030, something China plans to do anyway because of the high costs of pollution from coal plants. The U.S. commits to reducing its carbon emissions by 28% below 2005 levels by 2025, in place of the 17% currently set in 2009. This would increase costs of energy in the U.S., says WSJ, without any serious effort to cut emissions further in the developing countries.

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Over 50% of respondents in the 2012 Gallup poll view Japan as the U.S.'s most important partner in Asia, compared to 39% for China. The shift in how Americans view China is pronounced in the last 3 years. In 2010 the two countries were tied 44%-44%. In 2011 China was 39% to Japan's 31%. In 2011 India, S. Korea and Australia were added to the poll as partners. Among "opinion leaders" such as business executives, government officials, academics and journalists, China gets 54% to Japan's 40%. The poll is conducted by Gallup for the Ministry of Foreign Affairs of Japan since the 1960's. The analysis shows that respondents picked China for economic reasons not for political reasons. A survey of the general population shows 84% view Japan as a dependable ally, up 2% froom 2011, with similiar trend for opinion leaders.

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Ford Motor company plans to expand its auto dealer network in China to 680 dealers by 2015 from 340 in 2010. Ford will bring 15 new vehicles and 20 advanced powertrains to China by 2015. This is part of Ford's effort to catchup with GM, Toyota and Honda in China.

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China's campaign against corruption and the popular programs that the Chinese government of Jinping encourages on television. This includes the 52 part series on television called "In the Name of the People." The programs show how the Communist party's upright officials stand up against the corrupt ones. The idea is to build up the reputation of the Communist Party, as it sagged under the previous administrations during the period of rapid growth when such behaviour was tolerated to in some ways.