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Attacks from Iran on Saudi oil infrastructure leading to a loss of half of Saudi oil production is likely to be a problem for countries such as China, South Korea and Japan that have reduced oil imports from Iran and increased dependence on Saudi supplies. This was a result of tighter U.S. oil sanctions on Iran. India is also affected. About 30% of the lost production will be restored say Saudis.  The U.S. is less dependent on Saudi supplies and as Gerald Seib points out in a video in WSJ the U.S. has 3 reasons not to intervene on behalf of Saudis. The U.S. has increased its oil production from shale oil and is less dependent on Saudi oil. It is also becoming reluctant to engage in Saudi Arabia's wars such as the one in Yemen against Houthi rebels. There is also less support in Congress and in the country for supporting endless wars that originate from Saudi actions. A Trump tweet before his election campaign shown in WSJ makes this point about endless wars and the U.S. needing to be paid trillions of dollars for these wars. The conflicts in the region affect China and India where growth is close to 5% before any impact from oil price increases. Together Asian countries take in 72% of Saudi oil exports and China now imports more Saudi oil than Russian oil by a wide margin- in June 1.88 million barrels a day. Saudi oil makes about 19% of imported oil in India and 33% for Japan. Imports into India of Saudi oil are up 8% this year to 847,000 barrels a day in 2019. China is better situated than Japan with reserve supplies of 644 days of imports compared to 230 days for Japan. This why Japan has played a constructive role in reducing tensions between the U.S. and Iran and urged both sides to negotiate. China and India also have interests that converge in reducing tensions between the U.S. and Iran. As a first step president Trump removed his National Security Adviser John Bolton in preference for reduced tensions.  ...

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The Biden administration is the first administration in decades to do this to protect American industry and industry of other manufacturing capable nations such as India, in effect protecting a whole new supply chain that allows all to participate but non to dominate unfairly. The Bush, Trump, Obama administrations failed to do this. A concern most economists and many business leaders fail to understand to the great misfortune of America's workers and communities and workers and communities in other nations. As the US restricted flow of technologies in advanced chips to China to protect its tecnologies, China is investing $40 billion in mature chips. The Biden administration is now shifting its attention to mature chips technologies to protect American chip industry and prevent overproduction of mature chips in China for export leading to dumping of the product in the US and hitting the domestic chip industry hard.

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People in China are drinking more milk and cream desserts, and eating more cheese with a shift in eating habits. Traditionally this was not a big part of Chinese food. Wholesale prices of skim milk powder have surged by 26%-47% in the U.S. and Europe with this increased Chinese demand. Earlier China imported more milk powder for baby infant formula after tainted product was discovered in domestically produced baby milk powder. In 2019 China imported about 33% more skim milk powder and 23% whole milk powder than 2018. 

Parents encourage milk drinking habit. Even the higher lactose intolerance in people from East Asia is not a problem in this increase in dairy consumption. Beneficiaries of this increase in demand are farmers in America, Europe and New Zealand after several years of difficult conditions. Dry conditions in Australia and northern Europe, higher feed costs, hurt dairy farmers.

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Inflation is over 2% in Japan for the 22nd month. Decline in working age population by the 1990's, the shift of jobs and factories overseas, and the banking crisis all led to deflation in the Japanese economy. By 1998 inflation was setting in and has continued for two decades to 2022. This could happen in China as it's economy faces similar problems which is why linear projections from the last 10 years for China are misleading and erroneous, just as linear projections for India from the previous decade's growth were misleading and erroneous after 2014. The second decade after 2024 is likely to lead to major investments in infrastructure leading to India joining the developed nations.

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Over the next 20 years China will need 6500 737 Max single aisle planes and 1500 Dreamliners, Boeing says. China will make up 20% of world demand. The US visit of Xi Jinping and the major efforts for good relations of president Biden through vigorous diplomacy by Blinken, Yellen and others gives Boeing an opportunity to meet this demand.

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Modi refers to an ecosystem that continuously shrinks the pool of capital from government revenues, revenues intended to fund development roads, bridges and other infrastructure illegally siphoned away, that stalled and suffocated rapid development in India for 75 years. Without foreign investment there can be no rapid development in India. Without strong and efficient institutions foreign investment has not come to India in the last 30 years in the way it has come to China. These institutions of good governance that prevent such siphoning away of revenues enable 100% of every dollar or rupee of taxes to go into development essential for funding infrastructure, climate infrastructure, logistics and the other inputs of capital, labor, energy and land to build manufacturing capabilities. An ever widening pool of the inputs of capital, labor and land year after year- a process that Japan, then South Korea, then China has accomplished is possible. I It is only now taking place in India. What Mohandas Gandhi, Nehru and Sardar Patel failed to grasp in the 30's, 40's and 50's is that it was possible to have an independent India and still remain a backward undeveloped nation for a staggering period of 75 years or almost half of the period the British ruled India. What Mao failed to grasp in China and which was corrected by other leaders to make China an advanced economy able to fulfill the aspirations of the Chinese people, is also the situation that prevailed in India. Post independence leaders in China and India both isolated their economies, both limited human potential, both let institutions fail in good governance.  It is only now moving India into the process of developing an advanced developed economy by 2040, able to fulfill the aspirations of a youthful population of 1.2 billion people. ...

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Areddy describes the choices facing China's president Xi Jinping as he faces protests in Hong Kong demanding the resignation of Chief Executive Leung Chun-ying. Protestors are also calling for canceling of a plan to limit nominations for chief executive to a committee loyal to Beijing. Xi Jinping has experience with Hong Kong affairs as he held the portfolio for Hong Kong affairs as part of the leadership when he was vice president. There are precedents where Beijng has changed course, as it sees it important to put memories of Tiananmen protest suppression behind. In 2003 six years after Britain handed Hong Kong to China -under an agreement for "one country, two systems," that granted separate status and system of government to Hong Kong- an anti-subversion law was pulled back. And the unpopular Chief Executive Tung Chee-hwa, a shipping magnate, resigned after 18 months. Beijing has to balance its concern for the "contagion effect" of protests on other parts of China, with the need to maintain the right climate for business and investment in Hong Kong and other financial centres. With slowing growth and limits to overexpanding credit, a crackdown in Hong Kong would further exacerbate problems with the international community, and create tensions in Taiwan about future reintegration with China. China warned foreigners not to interfere, and the American Consulate in Hong Kong stated it "strongly supports Hong Kong's well-established traditions and Basic Law protections of internationally recognized fundamental freedoms, such as freedom of peaceful assembly, freedom of expression and freedom of the press." The British government also pointed to Hong Kong's "fundamental rights and freedoms, including the right to demonstrate," which were in the spirit of the 1997 transfer agreement....

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Share of US Counties where 95% of Kindergarteners are vaccinated against Measles drops to 28% from 50% in Washington Post Investigation of 44 states December 2025. 95% vaccination rate is what experts say is needed for "herd immunity" or overall protection in a class. Washington Post examination of data shows marked deterioration from 2018-2019 school year to 2024-2025 school year data and public records. That is 5.3 million children are exposed from lack of herd immunity from measles now compared to 3.5 million children earlier increase of 1.8 million children. This Wash. Post investigation shows 19,000 schools are exposed and one can go to this article to find on a map how your school district and country are doing in the 44 states. A big problem is emerging from public skepticism and politics in vaccination. For generations schools required vaccination proof- by 1980 all 50 states had laws covering students first entering school. And caught in vaccine politics legislatures are creating religious and other exemptions that have weakened laws. Wash. Post says it's examination shows not a single County in Idaho, Louisiana, Oregon Tennessee, Utah, and Wisconsin meet the 50% vaccinated requirement for measles required for herd immunity. This could mean more of these diseases will be brought back home including whooping cough to affect elderly and infants. Democratic districts such as in St Louis and Chicago also see drop in measles vaccination rates. In the sense that newly decolonized countries since 1950 such as China and India have emerged with good health systems and mandated vaccination , other public health action, there is a great need for the US to focus on bringing back the public awareness that existed after the 1940's in the US that resulted in significant advances in public health in the US in the FDR, Eisenhower, Kennedy, LBJ and Reagan administrations. It shows there is no victory in public health. A lot of work needs to be done, as much of the gains can get undone by events and public awareness is necessary. As pharmaceuticals, chemicals and plastics and bad nutritional habits took over American lives there is an effort under Kennedy at HHS to tackle that health crisis, but it brings with it challenges that date from the pandemic and different responses in different parts of the US to mandatory vaccination which also have to be met through education not social media. ...

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The US government plans to protect American technologies by restricting investment in China in specific sectors in which the US competes with China. The Biden administration put forward rules that prevent American investment in these sectors including advanced chips. In reports to the US Congress the Treasury Department and the Commerce Department stated that the agencies are considering a new regulatory system to address US investment in advanced technologies overseas that pose national security risks. The reports to Congress show the US will prohibit certain types of investments in other countries and will collect information on other sectors for future steps. Rep Rosa de Lauro of Connecticut has required the US government to prepare a report on the topic of investments in China as part of spending package approval. A group of Republicans and Democrats support this effort to regulate investments in China so that US technologies are protected.

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Value added industrial output in China increased by only 4.4% in August, showing deteriorating economy. Fixed asset investment outside rural areas, was up to 5.5% in Jan-August 2019 compared to year earlier period. Premier Li Kequiang says "Against the backdrop of a complicated international situation and given the higher  base of comparison, it is not very easy for China to still sustain a medium to high growth speed of above 6%." 
China's economy expanded at 6.3% in the first half of 2019- the government's target is between 6 and 6.5%.

In the light of this situation in the economy China is taking aflexible approach to trade negotiations with U.S. trying to separate issues of competition and technology of the long run from trade, and seeking areas of agreement after the rhetoric of the past 6 months.

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Yuen Yuen Ang presents the view that China is an autocracy with democracy characteristics. Her view of Xi is conventional reflecting contemporary ideas. Yet Xi was profoundly influenced by his father Xi Zhongxun and mother Qi Xin, revolutionary heroes in the fight against the British, Japanese and Chiang Nationalists which shape his view of the world. Zhongxun also shaped the response to the struggle for modernization after failures of the Maoist period, in efforts he made under Deng. In this sense he adapted to different conditions. This view of China's leaders is that they are intuitive and human, that China is simply responding intuitively under Xi to the conditions it faces and perceptions about these conditions to maintain the wellbeing of the vast majority of the Chinese people after the century of struggles 1850-1950 and later missteps. The experiment with capitalism and a new generation with no memories of the past meant to Xi and other Chinese leaders that everything that an earlier generation (his own parents) had fought for in the struggle against the British and Japanese invasions could be lost quickly, if China was allowed to fall into the kind of corruption and self-seeking leaders that marked the Chiang regime of the 1930's. This led to the effort to consolidate the gains of the Chinese nation made over 2 centuries since the rise of the British in Asia in 1800, with Xi seeing no choice but to take responsibility and the initiative as his father Zhongxun had done in the 1930's and 1940's to breakout of isolated regions in the north of China. The sudden shift to adapt to open covid policy is also apparent from Zhongxun's ability to adapt to and lead the changes after Deng's experiment with a market economy. A report by Rohan Premkumar in the Hindu on Jan 25 on a British sub-jail in the Nilgiri hills of Tamilnadu shows prisoners from the Opium wars with China sent to this jail by the British. These events still shape Chinese perceptions of the world- the backwardness in faceoffs with the west and the cost to the mainland Asian nations India and China. Inland river based civilizations on the Ganges and the Yangtze that failed, as Adam Smith says in The Wealth of Nations, to change in ways that the Renaissance  and the Industrial Revolution changed Europe. ...

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The yuan is up 5.5% since the peg to the dollar ended in 2010, reaching 6.469 to the dollar. But this is not helping the U.S. trade deficit. The U.S. Bureau of Labor Statistics shows the price of imports from China are up 2.8% in May over the same month prior year. And the trade surplus for China in the first four months of 2011 is higher than the same period in 2010. What is happening? The improvements in productivity of Chinese manufacturers and the acceptance of lower margins is reducing the effects on trade balance of a small appreciation of the yuan, so that only a fraction of that appreciation is showing up in higher prices for Chinese goods. Also significant is that the yuan's small appreciation against the dollar is not enough to make up for the dollar's fall against other currencies. The yuan is down 8.3% against the euro and has actually declined 3.7% on a trade weighted basis in the last year.

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Ethnic minorites are not easily persuaded that modernizing and investment can be traded for limits on cultural autonomy and on the religion, language and culture of the region. This is the situation in Xingiang and Tibet. What is not realized is that Mao's army took control of Tibet and Xingiang in 1949, which have not historically formed part of China, and the immigration adds another level of conflict because of the fear that the ethnic cultures are threatened. The Uighur revolt shows that the tradeoff of modernization for limits on religion, culture, language and participation in governance does not work in the ethnic regions of China, says the Economist. See the link in the NYT on Mr. Wang, a protege of President Hu Jintao, who himself was at one time in charge of Tibet. Because of this China risks getting more entrenched with continuing policies that may not work out.

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China is increasing use of domestic coal and reducing Australian coal imports in an effort to increase energy security and become self sufficient in coal. Spot price of thermal coal used to generate electricity is expected to drop by 39% in 2019. Coking coal used for steel production will decline by 38% as China uses more costly local coal and the steel industry in Europe, India and the U.S. lowers production with lower coal demand. The world consumed less coal in 2019 over 2018. Largely from less coal used in electricity generation which dropped by 2.5%.

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Suriname a small country of 600,000 people near Brazil, joins other countries with debt problems such as Pakistan, Sri Lanka, Zambia, and others which have piled up debt borrowing with unsustainable debt payments. About 545 million borrowed from China and total $2.4 billion in debt accumulated. It is now negotiating with the IMF for $690 three year loan. The US says China has to agree to join in reducing the debt burden so that the cost of assistance does not fall only on the US as the IMF's largest shareholder. 

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It is important to know the cause of 0.3% contraction in first quarter 2025 for US economy. It is says WSJ because of a 5% hit from net exports, the difference between exports and imports, as importers rushed to import more before a tariff deadline. Imports by the US increased by 42% in first quarter 2025. Some include MIchigan Governor Whitmer who supports the tariffs as a way to take back America's industrial base, build factories in the US, say the uncertainty of the way tariffs were implemented is damaging confidence in the economy. For instance could the US have excluded the EU, Japan, UK, India as allies, and focused on China.  The problem with that approach is that it would single out China. It means other nations Japan, South Korea, Germany are not investing in the US, also have used trade for unfair advantage, are not called out. This would put China in an odd position. It is better to call out all who benefited from unfair advantage including China, Germany, Japan South Korea, Taiwan, because this has more credibility, giving all a honest and fair picture that they could then look at themselves in the mirror and correct. In the short run it looks messy, the tariff methods look erratic and back and forth increasing tariffs is also messy and unruy. Yet when every major trading nation knows deep inside that US is only saying it like it is asking only for fairness in trade, it will lead it to negotiate a fair trade agreement with US. ...

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Tesla which had 11% of the new electric cars registered in 2024 through July, suddenly goes into free fall with registrations dropping to 3% and a 33% decline in the European EV market. From being second only to VW in EV market in Germany Tesla is not with a model even in the top 10. Tesla had got the support of the Scholz government to put abig factory near Berlin. Tesla CEO Musk's politics is having some impact with endorsement of the AfD by Musk seen as interference in German elections. The Tesla Y is priced at $74,000 another hurdle for buyers. And now there are many rivals from Germany and China. In an expanding market Tesla has lost 60% in registrations in first half of 2025 showing how deeply. BYD of China has a entry model Dolphin Surf for $20,000 in Germany, and has increased sales by 290%. Still Chinese car makers will only have 12% of the EV market and it is VW that is a winner in the competitive market in Europe. VW has ID.3 Pure for under $30,000 and in 2026 plans ID.2 Pure for under $25,000. ...

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The surprise is the DJT Senate bill cuts to about 75% of the solar and wind subsidies in the Biden 2022 IRA Act for $843 billion in investments that were going to Republican districts. New rules in the Senate version of 3B Tax Cuts Bill require US renewable solar to disentangle supply chain from China by 2027 or face an excise import tax. All renewable subsidies will also be phased out earlier by 2027 instead of 2032 set by the Biden administration in the Inflation Reduction Act. The Inflation Reduction Act passed in 2022 with subsidies, tax credits for renewables solar and wind led to $843 billion in planned solar and wind investments. Suddenly much of this is placed in doubt. Instead of 2032 phase out the date is moved up to end of 2027 for 30% subsidies and to end of 2028. The result is confusion in the renewables industry and opposition to the excise tax for not disentangling from China supply chain by end of 2027 spreading to the US Chamber of Commerce. ...

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Su Liping, professor at Tsinghua Unversity, says there were 180,000 protests, riots and other incidents, protesting economic injustice in 2010. Most of the incidents were against land grabs, corruption and abuses by local officials, and unpaid wages. Inflation has hit the poor, migrant workers and people with low incomes hardest. Food prices were up 13.4% in August over the same month prior year. Pork prices were up 52.3%. Other problems are now meshed in with inflation. Local government debt in China, according to the National Audit Office, was 10.7 trillion yuan in June 2011. The National Audit Office estimates 23% of this, or 2.5 trillion yuan, depends on land for repayment. Analysts say China's local government made repayment in 2010 using the 2.9 trillion yuan in revenue from land sales. The same amount of land has to be sold in 2010 to make repayment. At lower prices even more land may have to be sold. The danger say Orlik and Jie, is that inflation and the pressure to acquire more land- and consequently more land grabs- will pose severe risks to the social contract in China....

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Section 230 is a law passed in 1996 that makes the Social Media Companies and Media companies such as Meta and Google and others to have no liability for content posted on their sites. This has allowed these companies to grow and develop monopolies on the internet. Here CSPAN covers the hearings in the US Senate today December 9  with the following US Senators speaking at a Senate hearing on Online Safety for Children. Senator Whitehouse of Rhode Island describes the biggest problem as being the Section 230 which needs to be removed. The following mothers who are Senators and mothers or grand mothers of children were very vocal on this point- Katie Britt-Alabama, Martha Blackburn-Tennessee, Ashley Woody-Florida (former Attorney General of Florida).  Senators who are fathers or grandfathers of children speaking are-Josh Hawley-Missouri,      Whitehouse-Rhode Island, Bluementhal-Connecticut, Corbyn-Texas, Chuck Grassley-Iowa. Senator Whitehouse says-  "I understand Senator Graham was with respect to getting rid Of Section 230 Um, I strongly believe that Section 230 has long outlived its use, and it is now a real vessel for evil. That needs to come to an end. Um, the laws that Section 230 protects these big platforms from are very often laws that go back to the common law of England. that we inherited when this country was initially founded. I mean, these are long lasting, well tested. Important Legal constraints that have They've met the test of time, not by the year, by the decade, but by the century. And yet because of this crazy Section 230, these Ancient and highly respected doctrines just don't reach these people. And it really makes no sense that if you're a Internet platform you get treated one way. You do the exact same thing. And you're a publisher, you get treated a completely different way. And so I think that the time has come. I think it's pretty widely known that there were a core 4 of us. Ready to proceed with a bipartisan bill 2 and 2. And a A lot of work, important work, good work, valuable work has gone into making sure that other members of the committee and other members of the Senate have a chance to look at that and decide whether they want to join or not. And I'm at the stage right now where I think we just need to go." The Online Safety Act passed overwhelmingly in the US Senate recently still languishes in the House of Representatives. Ostensibly because of free speech but really because of monopolies and campaign contributions, and beyond this because of the idea that rapid internet growth gives the US economic and business leadership in the world. That is not how it has turned out instead by weakening the education of the children of the Nation this has created the idea in China and other nations that the US's period of world leadership has passed. In the overall scheme of things social media has weakened education in America as children of the Nation spend countless hours away from classroom education on their smartphones. Australia and other countries including China regulate the use of the smartphones and internet social media for children under the age of 14. This regulation strengthens education in these countries at the same time that the absence of limits weakens education competitiveness in America, and creates the idea that America's days of leadership in education have passed.The loss of this leadership means the loss of American leadership in the world in a decisive way. ...

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What is not reported is that the US could accept a shift of some appliance production overseas, what it could not accept is the shift of its manufacturing base in industries it created in semiconductors and technology to Taiwan, China and Japan, South Korea. The economists of the previous administrations were clearly wrong, and the previous administrations did nothing but observe the slow destruction of America's industrial base. It will take 4 years of the DJT administration for the investments to be made in the US, the future administrations will continue this policy. Deng and Kellman in WSJ clearly understate the importance of the policy changes for America's Level Playing Field ALPF. It is easy to say Whirlpool and Harley Davidson won't be coming back strongly soon as the EU, Japan and South Korean makers of appliances and motorcycles will be able to absorb most or all of the 15% in tariffs. Yet it gives them a better  and level playing field to compete with foriegn makers. What is not shown here is that the tariffs will help increase investment in EU and Japanese , South Korean automakers in the US, and will increase with lighter regulation the opportunities for American automakers GM and Ford. ...

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Eminent climate ecologist Nicholas Stern says India's commitment by 2070 demonstrates real leadership from Mr. Modi of India.The Guardian says India's commitment to net zero emissions by 2070 is realistic considering that it is decades away from its peak in economic growth and energy consumption compared to US or even China. Energy consumption is expected to grow faster than any other country in the next few years. India's population is also expected to pass that of China as the largest in the world. The Guardian says climate experts who did the modeling have said this was the most realistic scenario for India - to achieve net zero emissions by 2070. This also means India's peak energy emissions will be reached by 2030. Eminent climate ecologist Nicholas Stern says - "This was a very significant moment for the summit. This action might mean India's annual natural greenhouse gas emissions could peak by 2030. This demonstrates real leadership from a country whose emissions per capita are about one third of the global average."  Also significant is Mr. Modi's pledge to deliver on 5 commitments 1. 50% of India's power to be generated by renewable energy by 2030. 2. Increase of 500 gigawatts of renewable energy including solar by 2030. 3. Reducing carbon emissions by 1 billion tons by 2030. 4. Reduce carbon intensity of the economy by 45% by 2030. This relates to how efficiently energy is used to generate 1 unit of economic GDP. With 1.3 billion people India is the third largest emitter of carbon dioxide- at about 3 billion tons- after the US and China. In growth terms this means India is going to grow very differently from the way China did in 2000-2020 with its many highly polluting industrial plants. The head of the US Renewable Energy Agency Mr.Birol says in a BBC intervew that the cement and steel plants alone of China have more emissions than the whole of the European Union's total emissions. Much of this comes from old plants and old technologies with surplus production of steel from what is now a bygone era of excess, inefficiency and chaotic growth. India plans to bring climate change emissions and energy efficiency through renewables into its Gat Shakti master plan for the country's economic.development. ...

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With Hong Kong affected by the protests, then the crackdown by China, the pandemic, large companies that used it as a base for operations in China are now shifting to Singapore,Shanghai and other locations. Except for finance, retail and other industries are moving out of Hong Kong. Shanghai is seen as more connected to the Chinese economy. And for others Hong Kong is no longer as global now with its integration into China.

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With better currency reserves and lower debt the Asian countries are in a better position than in the 1997 crisis. But a big problem will be lack of export markets. In 1997 Asian countries could export their way out of difficulties and the devaluations actually helped exports. And domestic markets are weak with weaker currencies making imports more expensive. In the past 10 years consumption as a percent of GDP has fallen in China and elsewhere in Asia outside Japan, even as exports as a percentage of GDP have grown by about 30%. And this has implications for Russia, Brazil, Australia and other countries which send soyabeans, mining products, commodities and oil to meet Asian demand. Riskier still is the prospect as Stephen Roach of Morgan Stanley Asia reminds people. is that when the tide goes out you can see the rocks for the first time which were covered by the hyper growth of China. China may see a big increase in nonperforming loans for its banking system, loans tied to the real estate sector where prices are falling. ...