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The joint statement after the G-8 summit stated that "our imperative is to promote growth and jobs." It stated the budget deficits need to be addressed but said "spending cuts must "take into account countries' evolving economic conditions and underpin confidence and economy recovery." Germany's Merkel in her remarks said growth and deficit reduction supported each other, that "we have to work on both paths, and the participants have made clear, and I think this is great progress." Opposition Social Democrats in Germany say Ms. Merkel is adept at changing as the situation changes, and it appears Merkel is making the transition away from strict austerity policies she had championed earlier. Especially now with fresh elections in France, Netherlands and Greece, and the election of Francois Hollande on a pro-growth platform, the German position of strict austerity is being increasingly questioned on all sides. French president Hollande met U.S. president Obama at a pre-arranged meeting prior to the summit. Obama and Hollande see the need to reduce high unemployment in the U.S. and Europe by encouraging growth, creating a common interest....

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Like hundreds of thousands of other young migrant workers in China's factories, Yuan Yandong is from a rural area and lived on a farm. Better incomes have brought them to the factories in urban areas. In this case travelling long distance by train from Guangdong province to Shenzhen. As living standards improved across China and the government expressed a keen willingness to encourage workers to exercize their rights to fair wages and working conditons- especially by creating increased awareness of new labor laws in the state run media- migrant workers are becoming restless with conditions they accepted a few years ago. The growing use of cellphones and access to the internet have made news travel faster. A visit to a Foxconn factory shows a young worker, age 24, sitting on a stool 6 nights a week, 12 hours a night, with a quota to assemble 1600 hard drives for American computer storage company EMC, with the pressure to work continuously against the clock for each step in the manufacturing process. Foxconn is known for its highly disciplined nature of work, akin to a military style. Behind the scenes factories like Foxconn employ methods once used in the US at a similiar stage of industrialization, with 500 technical people continuously looking for the most efficient way to organize each step in the production process. Each movement and action of the worker is measured for time taken and process efficiency, according to experts at Tsinghua University in China. This means many factories can use less automation- and so less capital intensive manufacturing- and go to extremes where workers perform like machines. Yuan's ambition is to work only for another 2 years and then use his savings to get into hotel management. His wages are 75 cents an hour, and with the overtime premium about $235 a month. Foxconn announced a 33% raise in wages as a result of worker protests. The mind numbing monotony is becoming less acceptable in a changing China, and worker turnover in such factories is rising. After the initial burst of industrialization in which young migrant workers played a signifcant role in manufacturing, a new chapter in China's development is beginning- one less likely to create the large trade deficits with the US and Europe- which is moving in the direction of a larger domestic market with higher worker wages....

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China's premier, Wen Jiabao, opened the National People's Congress, annual meeting of the Chinese parliament, by saying that China had lowered its growth rate to 7.5% from 8%. GDP growth for 2011 was 9.2%. Wen set an inflation target of 4%. The CPI index increased by 5.4% in 2011. Wen set 14% growth target for M2, China's broadest measure of money supply.

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Finance Minister Joaquim Levy, a University of Chicago trained economist, is replaced by planning minister Nelson Barbosa, as the new Finance Minister of Brazil. President Rousseff faces criticism as Brazil's economy contracts and ordinary Brazilians feel the effects of fiscal austerity policies pursued under Levy. Former president Lula da Silva was critical of Levy's policies.

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S&P Dow Jones Indices which runs the Dow Jones Industrial Averages Index says it will drop Alcoa, Bank of America and HP from the index and replace these companies with Goldman Sachs, Visa and Nike. HP was the second computer company after IBM that was added in 1997. Alcoa was made part of the index in 1959.

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Keith Bradsher visits Guangzhou, China, just as prime minister Wen Jiabao tells the National People's Congress that China is changing its priorities from high growth to sustainable development. As recently as 2007 GDP growth reached 14%! The minimum wage is expected to rise 13% each year under the five year plan. Even with the increase in wages owning an apartment is unaffordable in Guangzhou- a 1000 square feet apartment costs upward of $300,000, showing the extent to which the bubble in real estate prices affects young people who cannot afford to own an apartment. A new graduate with marketable skills such as computer engineering makes about $6000 a year, putting owning an apartmet beyond reach. Another change he notices today is that during visits to construction sites he does not see flood lit sites at night. This used to be the case because builders were scrambling to build. With government policies discouraging the property bubble there is no longer a need for work at night. The focus now has shifted to build low income housing....

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The historical allusions in the media in Greece, Italy and Germany, and cultural perceptions which have increased differences in the European Union. This comes at a time of austerity programs in the Southern tier of EU countries and pressure on Germany to fund the debt reduction in some EU countries.

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A shift in priorities away from focussing on high growth to lower sustainable growth was announced by China's premier Wen Jiabao at the National People's Congress, China's parliament, in March 2012. This shift will reduce investment in infrastructure, power generation and exports, which will affect the level of imports of commodities from commodity producing nations in the Middle East, Australia, Canada and Brazil. It should increase imports of software, computers, entertainment, tourism and high tech goods from the U.S. and Europe. Chinese leaders have said they would make this kind of shift for some years now but growth has consistently increased more than the target rate, and domestic consumption as a percentage of the economy has actually decreased in the last decade. Now 9-10% growth rates may be a thing of the past and the target of 7.5% set this year may be actually closer to the real figure. The Chinese leaders have belatedly realized the need to make these changes now because slowing markets in Europe -which is seeing declining growth and high unemployment- and in the U.S., make the issue impossible to avoid. Wen told the Congress: "Accelerating the transformation of the pattern of economc development... is both a long term task and our most pressing task at present... Domestically it has become more urgent but also more difficult... to alleviate the problem of unbalanced, uncoordinated and unsustainable development." This is his way of saying that its unavoidable and better to start in earnest now, and at the same time recognizing the resistance to change from the stateowned companies and the other interests who have benefitted from surging growth, and now occupy a central role in the power structure. An opinion article in the People's Daily, China's official newspaper, said: "imperfect reforms are to be preferred to a crisis caused by no reforms." The World Bank's president Zoellick is respected by the Chinese leaders. He also urged them to make changes now. The recent report of the DRC, China's planning research arm, and the World Bank, also laid out the new direction away from a focus on infrastructure to domestic consumption. The fear is sudden deceleration in the absence of policy action. The impact of this will be negative for commodities over time, leading to slower growth in Australia, Brazil, and Canada. It should boost imports from Europe and the U.S. of high tech, consumer, pharmaceutical goods over time....

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James Glassman, has published a new book, "Safety Net." In the book he makes an admission that he was wrong in his theory and understanding of the stock market described in his earlier book, "Dow 36,000," published in 1999. That book called for stocks to triple in value in 5 years. Glassman wrote then, at the height of the tech boom, that stocks could immediately double, triple or even quadruple as was happening at that time for tech stocks going public, and they would still not be too expensive. Part of the arguments rely on a definition of risk. Glassman said in his earlier book that stocks and bonds are equally risky in the long run, because stocks had never lost money over the long term and over long periods of time their returns were constant. But Glassman is using a technical definition of risk as how much returns can deviate from the average. What investors face in the real world is a common sense definition of risk, which is- what are the chances you will lose money? This point says Jason Zweig, is clearly stated in Howard Marks coming book, "The Most Important Thing." And what about the point about stocks never losing money, the central point in Glassman's thesis? Here research from Dimson, Marsh and Staunton of London Business School is useful. This research shows that in France from 1912 through 1977, stocks lost money after inflation. The upshot of this is to emphasize the need for looking at risks as real in the real world, where things have changed to the point where the current stock market rally is attributed by the Fed chairman to vigorous efforts to fight a downturn in the economy. For investors these risks are not going away with a sudden surge in stock prices....

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Diesel prices are regulated and subsidized by the Indian government, but gasoline prices are deregulated since 2010, resulting in gasoline costing 64% more than diesel in India. As a result buyers are staying away from gasoline cars and shifting to diesel creating distortions in demand. The government is considering a tax on diesel cars and SUV's of between $3000 to $4600 to correct the distortion. Because lower income people woud be hurt by increasing the price of diesel it continues to be subsidized. Because of the uncertainty car manufacturers are shutting down production to reduce growing inventory of gasoline vehicles. High interest rates of 12% on car loans also reduces demand. Suzuki Maruti sales declined 6% in May 2012, Ford and GM showed sales declines of 14% and 20%. The year ending March 2012 shows Indian car sales growing only slightly by 2.2% to 2 million cars. Sales were rising at 29% only about a year ago. Gasoline costs 68 rupees a liter in New Delhi after a 11.5% increase in May 2012, compared to 41 rupees per liter for diesel. The increase in gasoline prices is a result of the government having difficulty paying the rising imports of oil, costing $141 billion for the year ending March 31, 2012. The sharp slowdown in the car industry and the problems in the energy sector have affected India's growth rate....

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Krugman says that Obama better warn the Chinese that they are playing a dangerous game with their currency. He says month after month of the suffering of unemployed workers in the USA is going to look very bad for the Chinese, at the same time as the trade deficit numbers soar again. He asks for urgency from the Obama administration in telling the Chinese to let their currency appreciate . See the related article by Niall Ferguson.

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The China Banking Regulatory Commission points to dangers of the Non Performing Loans ratio rebounding and serious risks in the financial sector from bad loans. CBRC chairman, Liu Mingkang, points to the risks associated with local-government financing platforms, and the real estate sector and industries with excess capacity, in the 128 page report for 2009 shown on its website. And he points out that fundamental cracks and flaws internationally, that were exposed by the global financial criis of 2008, have still to be resolved. He cites the regulatory issues, "too-big-to-fail" issue for large financial institutions, cross-sector and cross-country risk contagion toxic assets, and the budget deficits facing European countries, as major issues posing systemic risk.

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The Labor Department reports that there is no U.S. productivity growth in the 4th quarter of 2014 over the prior year. U.S. productivity growth is about 1.3% for the period since 2009, showing a weak expansion. Job gains of 295,000 in February 2015 show an improving jobs picture, yet wage gains are tepid. This is partly due to slack in the labor market not reflected in the official unemployment rate of 5.5% for Feb. 2015, with a large number of part time workers who do not have full time work. The low productivity growth is another reason for low wage gains in this economic recovery. Economic growth is also weak with economists estimating GDP growth for the 1st quarter 2015 at 1.5% annualized. GDP growth is in the 2-2.5% growth range since 2009. Hourly wages are up less than 2% since 2009, with hourly wage growth in Feb. 2015 at 2% over the prior year. Weak business investment is part of the reason for the sluggish economic growth. Macroeconomic Advisors estimates the capital investment for equipment software and buildings is seeing growth of only 0.3% in the last decade, much lower than in the last forty years. With most of the gains from the internet technology advances already made there is less prospect of a sudden increase in productivity....