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The Times correspondent in Beijing says he sees two Chinas one that is showing technological advancement in 5G, in space technologies, in information technologies, infrastructure building in big cities. The other China is in rural areas away from the big cities, in smaller towns in regions away from Beijing and Shanghai. These areas have suffered neglect and have changed little over decades, with the focus during industrialization on larger cities and the coastal areas. This is evident in the manner health services infrastructure and development of medical personnel and doctors were neglected in the rush towards building manufacturing and infrastructure of road and rail. There is a shortage of doctors and hospitals, health services are costly, and waiting lists for beds at hospitals is huge. Doctors are also not held in high esteem because the focus is on profit in the market economy that has taken over the health sector.  Education of citizenry on respecting the common welfare which is expected and normal in Europe and America has also suffered during the rush to industrialization. Efforts to ban and eliminate use of certain wild animal foods not being respected by fellow citizens can be seen in this context. This caused the SARS virus epidemic and the epidemic today from the coronavirus. Seen from this angle a slowdown in construction, infrastructure building, and a slowdown in the economy, can even be healthy, so that focus can be shifted to better health, better sanitation, and better medical infrastructure including medical human resource capabilities. Investment in public education on health and self enforcement of rules by citizenry for a better society is indispensable for progress. It is in these conditions that the challenge of the national and international emergency of the coronavirus can be seen today. It also provides an opportunity to reflect on progress so far and the needs of the future. These challenges are even tougher than repeating what one has done before such as building more and more infrastructure, as they involve building a better society through public discipline along with investment in health and education services. This provides a lesson for many Asian, Latin American and African countries in the rush to industrialization. Turning over the health sector to a market economy making services costly and distributed unevenly in the population has not worked in the U.S. for the betterment of all citizens and a healthy society. Carrying this over from U.S. to China and not learning from Europe in what Europe has done well in the less costly and broad distribution of health services for the people, is one of the poorer lessons learned. This is also true for India and South Asia, South East Asian countries in their rush towards industrialization.  ...

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China, India, Brazil, Mexico, South Africa, Argentina, Saudi Arabia, countries that are part of the G-20 are not part of the G-8. Without the developing countries no real progress can be made on climate change or on emissions control. Climate change was a key focus of this summit in Itlay for the G-8 but with India and China only on the sidelines and acting more as an opposition excluded from the main deliberations the whole climate change agenda had to be shelved. The European countries lose influence in an enlarged summit so the G-8 keeps going along. Sweden holds the rotating Presidency of the EU, so the Swedes are there also. And so is Portugal in away with Manuel Barroso representing the European Commisssion. Except Japan, Asia is not represented, and no country from Africa or Latin America is represented. The European club looks like an anachronism and it is. Merkel and Sarkozy say they know this, but there is too much resistance in Europe to giving up this privilege. When the Guardian reported that Italy may be left out in future meetings of an expanded summit. the Italian press and the Italian prime minister Berlusconi denounced the report. Other countries that lose influence in an expanded arrangement are Canada and Japan. ...

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Desmond Tutu who died yesterday, was one of the three leaders with Nelson Mandela, and De Klerk who shaped a new South Africa with an attitude of rebuilding through reconciliation that stands out in the recent history of Africa and the world. South Africa's potential and the lives of the South African people are better under a framework that brings all communities together for unity and cooperation. After years of fighting Apartheid policies Tutu headed the Reconciliation Commission when De Klerk and Mandela crafted a way out for South Africa from segregation and international isolation. After failures of the ANC under Jacob Zuma, Desmond Tutu called for changes. He also was the first to point out the failings of African countries that descended into misrule and oppression. Tutu was as important to South Africa as Mandela and Klerk in the way he made democracy work by calling it out when it failed to live up to the ideals. Born in 1931 he witnessed the transition of African countries into free nations, with some failing to achieve the aspirations that drove the freedom struggle. The son of a teacher he followed in his father's footsteps after graduating from the University of South Africa at a time when black schools suffered from crippling lack of resources.  He went to King's College, University of London on a scholarship, and earned a bachelor's and master's degree there. Living in England helped free him from the self-contempt that results from racism, he says in his 2006 biography. Like Gandhi the years spent in England gave him a sense of what could be learned from this experience in shaping the future. He returned in 1975 and fought Apartheid using Gandhi's methods of non-violent non-cooperation. In 2025 South Africa will have completed 50 years since that time and can look back at how far it has come even with the shortcomings. And the steps that can now be taken for modernization as India and other nations move forward to show democracy can effectively deliver on good governance and economic progress to fulfill the aspirations of the people for a better life. ...

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Bernard Lewis's "The Arabs in History," is a short book which confirms Zakaria's point about the openness of Islamic societies before the 19th century, with some exceptions in certain periods. Most books or a quick look at Wikipedia shows us that the Renaissance in Europe in the 15th century got its boost from books by ancient Greek authors that were available in Arab societies long after they were forgotten in Europe. His point about Indonesia and India is also true to a large extent except for periods such as the one under Aurangzeb (17th c.). Muslim societies in British India (todays Pakistan and Bangladesh) experienced less social and educational reforms under the British than Hindu societies for various reasons leading to larger backwardness, illiteracy which breed extremist ideas. This is likely to change throughout North African Arab societies and South Asia in the next 50 years, especially with the modernization drive underway in India, which is likely to spread to other parts of the region. Islam as a missionary religion with force of arms spread in the 7th-9th century rapidly over Arab North Africa and parts of west Asia, and later to South Asia. Once established there were long periods of openness to ideas and books, and different cultures ( with the exception of preferences for Muslims), and a stress on commerce which inherently reduces religious vehemence, as the example of Britain shows. For this reason the current conditions in Islamic societies is more atypical than typical. A factor that has worsened it is that 19th c.-20th c. Islamic societies have put less emphasis on commerce and industry than historically seen in prosperous Islamic societies, on which more research is needed to understand why. Another factor is the impact of the interface with technologically and scientifically progressing Europe and America not becoming a learning experience for acquisition of this science and technology and making it one's own, a pattern seen in Buddhist societies of Japan in 19th c., South Korea in 20thc.,and China 21st c. Because Buddhism sprang from Hinduism or a response to Hindu ideas in India, India could be put alongside China for the 21st c. rapid assimilation of western science and technology making it one's own. When there is a violent collison between Japan and U.S. Admiral Dewey's ships, or China and British advances around 1900, the initial reaction of rejection is reversed with adoption of western technology and practices making it one's own. Similiar response in India. Islamic societies have had an extended period of rejection for reasons not fully understood even today. This is likely to generate the kind of internal debate about how to revert back to the usual mode of adoption in Islamic civilization, with the potential catalyst in India and other locations in the Middle East. The most respected German of the 19th century is Alexander Von Humboldt, a naturalist who advanced scientific knowledge, and a mentor to Charles Darwin in England, author of "Origin of the Species." Humboldt says- "There are no inferior races, we are all humans, and we are all destined to reach for and grasp liberty." That Humboldt spent most of his best years in Paris, France, which he compared to the provincialism in his native Berlin, goes to show how Humboldt, Darwin and Humboldt's friend Aime Bonpland of France, maintained close cooperation and friendship and anticipated the close cooperation in Europe since the second half of the 20th c., long before European politicians and governments grasped this. Commerce, science, travel, media and free exchange of ideas, are as favorable to progress as politics and ideology is inimical to it....

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Arvind Panagriya, Prof. of Economics at Columbia University, points out the key initiatives of the Modi government in its first four years which will show results in future years for development of the country.  He mentions the Swachh Bharat Mission and cites results that show rural households with toilets are now 84% up from 38%.  By 2019 the whole country will be defecation zone free on the 100th anniversary of the birth of Mahatma Gandhi. The Dhan Jan Yojana DJY accounts opened for rural households are up to 316 million. Aadhar cards for identification are up from 650 million to 1.2 billion. The Aadhar and DJY work together to enable direct transfer of benefits to poor households, eliminating the leaks in benefits transfer and ghost accounts of the period since independence in 1947. Not mentioned by Panagriya is the Health Insurance scheme for lower income households that enable families to survive a sudden medical expense that could put them in dire straits.  These efforts work in a way to change India from the ground up from its villages and rural areas as envisioned by Mahatma Gandhi in the struggle for independence. The land acquisition law amendments were put on hold till farmers concerns could be better accomodated, an area of concern for industrial development cited in an editorial in the Hindu newspaper. Fiscal consolidation and inflation targeting have resulted in an average inflation rate of 4.3% for the 4 years of the Modi government. Inflation was over 9% in the last 2 years of the previous Congress UPA government with GDP growth dropping to 5.9% for the last two years. Average GDP growth for four years for the Modi government is 7.3%, even after the changes to implement GST taxation for one national tax eliminating state barriers in interstate commerce and demonetization to fight corruption and black money. Rate of GDP growth should be higher after the gains from the initiatives and the new GST integration of the country are felt, with increase in investment and FDI, after infrastructure improvements and land acquisition arrangements are made. Transportation infrastructure modernization initiative pushes ahead with the first bullet train in the pilot project for Ahmedabad- Mumbai set to start in 2022. This is a $17 billion project financed for $13 billion by the Japanese government at 0.1% loan for 50 years, moratorium on repayments for 20 years, using E5 Shinkansen series technology. Implementation of this project on a sound financial basis should lead to transformation of the Indian rail network, raising the level of technology implementation across the entire Indian rail system. Such an achievement would rival the first introduction of railways into India in the nineteenth century under the British. A new bankruptcy law is intended to free up capital for investment by putting behind the large number of non performing loans in the Indian banking system. Changes made by the central bank RBI are designed to speed up this process so that loss making enterprises are absorbed, consolidated or shut down, a legacy from the earlier period.     ...

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Chile's new constitution was drafted after a vote on a constitutional convention in which many people not involved before and on the fringes of society including indigenous groups were elected. More than half are independents and from different groups of society not well represented before. As a result of this the lack of experience has led to enshrining every single right that one could think of instead of focusing on what the protests were about about - the pension system, unfairness in access to health housing and education in the way funds are allocated from the budget, and promoting fairness in government.  At this time there is no certainty that it will be passed. A 36 year old student protest leader Gabriel Boric is the president elected after two years of protests about the unfairness of the system that took shape under a constitution written by a military dictator Pinochet who ran the country from 1973 to 1990. Pinochet came to power in a coup that is common in the history of South American Republics such as Brazil, Argentina, Chile and other countries. During the period of the government of Marxist president Salvador Allende the country was polarized resulting in the military taking over.  If the constitution is rejected a new convention will be formed to write a new constitution. In following the Structure of the US, Canadian, or British constitution, or the Indian it is important to look at the document so that it will stand the test of time rather than simply enumerating the rights of man. It is also important to focus on how to make the basic rights such as food, housing and education be well funded and society to be run along lines of basic fairness in incomes, while protecting enterprise and industry that can create new wealth for the country. The large South American economies are mainly dependent on commodities for export and there is a need to fund new business sectors which are not in commodity products- copper in the case of Chile- so that the economy can develop in a way that funds progress in incomes. ...

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The astounding fact in this French FR24 report on the Paris Climate Change Agreement and country carbon emissions show that China's emissions accelerated to rise 3 fold in 2015 to about 12 billion tons of carbon emissions from about 4 billion in 2000. US remains at about 6 billion. India is at about 3 billon tons of carbon emissions, about where China was in 2000 when it had about 4 billion tons of carbon emissions. This is shown in the graph on carbon emissions from FR24. The US, European Union graph curves on tons of carbon emissions since 2000 are all flat or declining, India rising slowly from a small base, China's curve is rising straight up from a large enough base at an unbelievable and dangerous rate. What has happened and is it getting worse? China's economy expanded too quickly as globalization was accelerated by banks, and business in the US and Europe, and by the Chinese governments at the local level and the state level. This had negative consequences for US, Europe and China. The too fast growth in China at rates of 10-15% based solely on False GDP indicators that did not take into account damage to the environment and workers was that it hurt manufacturing and working class in US and Europe and contaminated the environment. This was not like growth of Japan in 1960-1980, a smaller country in the way it affected the US and European working classes. Hyper Growth at 10-15% of a large country with 1 billion people compressed over a short period, is cited by Greg Ip in the WSJ as the cause of the negative impact on America.  It hurt China through pollution of rivers and land at an accelerated pace. It hurt China as trade with US and Europe became unsustainable with the loss of manufacturing in the US and Europe leading to a trade war. From these graphs of emissions it now appears that the 3 fold rise in carbon emissions from about 4 billion tons in 2000 to about 12 billion tons in 2015 is the result of unregulated business activity of all those who preferred to push hyper growth in China purely for reasons of profit such as investment banks and corporations in US, Europe, and state or local companies in China.  This has also aggravated inequality in US, Europe and China, and hurt rural populations. Xi Jinping is attempting to correct this in China, Biden is trying to correct this in the US, and Scholz will now attempt to correct this in Germany and the European Union. It is also to be noted that China in 2000-2015 did not have the benefit of the newer technologies that India now has access to, which is why India says it is able to reduce carbon emissions per each unit of GDP by 35% from 2005 levels by 2030. It is this efficiency in producing units of GDP with newer and newer technologies that China lacked in its period of hyper growth 2000-2015 that now looks to have hurt China- with overflow of highly polluting steel mills and other factories which it would prudently and wisely have cut back on. Looking back at this period one sees the wholesale transfer of highly polluting plants in Germany being sold and put up in China, a poor developing country in 2000. Was this a good decision for Germany or for China? In this way the banks and large corporations in the US and Europe who use economic indicators that are limited such as dollar profits, without overall indicators that include negative effect damage to the environment that requires huge investments to correct, problems of trade wars leading to political conflicts, are acting like a person walking blindly in one direction.  With some foresight China and all its trading partners would have done better with slower but more careful Chinese growth of 7-8% that would have better met societal goals in US, Europe and China, avoiding high carbon emissions segments of industries from Day 1. Jinping is doing this in China, and Biden is doing this in the US- cutting out highly polluting factories and segments of industries- but in a climate of mutual distrust, which could have benefitted the world when conducted in a climate of cooperation and trust. The pandemic made the situation even more difficult. Power shortages in factories and blackouts in Chinese cities have led to a reversal of policies on use of coal in China months before the COP26 Glasgow conference and G-20 summit leaving a huge gap. Without the presence of Xi Jinping at COP26 in Glasgow and with Chinese participation uncertain significant progress on climate change is elusive. Estimates by US Renewable Energy Agency is that it would cost $131 trillion to pay for limiting emissions to global warming of 1.5 degrees Celsius. Some major share of this cost can be attributed to the increase from about 4 billion tons in 2000 of carbon emissions in China to about 12 billion tons in 2015, increase by 3 times. One can clearly see from this sudden jump in carbon emissions in China that policies of hyper growth with unregulated polluting industries adding to GDP growth figures was bad policy for China, bad policy for US, and Europe, even if it offered temporary profits for individual companies. India has the advantage of learning from this experience and charting its own wiser course as a partner with US, Europe and Japan and by Modi's vigorous efforts in renewable energy. The lesson- look at all indicators of progress, including climate and society, not just economic indicators in profit or dollar terms, take the tough decisions early in regulating polluting companies and industry segments, and bring full and active public participation with transparent access to data on climate damaging activity in real time because climate and the environment we live in free of polluting substances belongs to all the people, belongs to all life on the planet from trees to animals and birds, not companies that can choose to ignore it. ...

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Friedman compares the anti-corruption movements in India and the U.S., the world's two largest democracies. The Occupy Wall Street anti-corruption movement in the U.S. focusses on the excessive influence of banks on lawmakers, regulators, and the government, through the use of campaign money, revolving door for government officials and regulators to join banks, and intense lobbying. The anti-corruption movement focusses on corruption in government at higher levels, such as the handling of government licenses, and at the basic levels of needing to bribe officials for something as simple as getting a birth certificate or other government document. Both have pernicious effects, in the U.S. excesssive bank influence leads to taking excessive risk for higher bonuses, putting the entire financial system at risk and creating a crisis in housing that delays the economic recovery. And in India the corruption leads to retarded progress, as funds to invest in infrastructure and development are siphoned off, business and entrepreneurs are required to pay bribes at each step, and ordinary people face the need to pay bribes for the most routine interactions with government officials. In the process this creates more unequal societies by skewing the distribution of benefits from wealth created to groups that are better equipped to game the system. The economic system once distorted in these ways has tendencies to take talent away from productive activity and innovation which create wealth, and direct it towards speculative activities....

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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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A detailed look and appraisal of the Tata's achievement and the vision and plans of Ratan Tata. See the Creation of Wealth a book about the Tata family and the epilogue written by Ratan Tata. And Conversations with Tata about Ratan's father Jamshedji Tata. Some of the achievements are the restructuring of Tata Steel, the acquisition of Corus, the Tata Motors Indica car and the first 1 lakh ruppee car the Nano a Ratna Tata vision coming true, the growth of Tata Consultancy in the software industry, the entry into retail, telecom, biotech, solar, and others, all meant to put Tata at the forefront of India's industrial development and to bring millions of Indians into the market economy. A lot of foresight is built into this, and now Tata believes in setting bigger goals following the example of China knowing that as India grows it will grow into Tata's larger projects. The Nano especially makes it possible to put a car in the reach of India's millions and by this way helping build a large auto manufacturing industry in India for the first time, and enlarging a number of other industries like steel. And Ratan Tata is not content with what tata achieved with the Nano, he wants Tata to reinvent the auto business. In the process of doing all this Tata has kept to its roots which is a strong social committment and a ethical foundation. Even the Jamshedpur Tata Steel restructuring was done by keeping the committments to education, health care etc for Jamshedpur. Tata is owned 66% by a charitable foundation and the ownership and management structure is designed such that even though the Tata family owns only 3% of the shares Ratan Tata manages the direction, goals and progress of the diverse companies which are independently run through management groups that oversee the companies. These management overseeing structures are the holding companies Tata Sons and Tata Industries staffs, and the Group Corporate Office headed by Ratan Tata and which has 9 senior executives who sit on the boards of the companies and act as mentors, nentoring managers and supporting corporate social responsibility values. ...

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Procter and Gamble's new CEO, Robert McDonald, set a new goal of over half a million customers a day for five years, hoping to add people in remote villages of China, India and other developing countries for its shampoos, toothpaste, diapers and other products. In many places people are not even familiar with the products like diapers, and need education about the benefits and use. McDonald sees the potential as just "absolutely amazing, amazing." And under the prior CEO, Lafley, progress was made in Mexico, and developing countries are now 32% of the $78 billion in sales, up from 23% four years ago in 2005. Sales are doubling every 4 years in these countries. In Mexico the marketing at low price points throughout Mexico has moved sales per capita to $20, which compares to $1 for India and $3 for China. The idea is to move China, India and places like Nigeria up to the Mexican level. McDonald sees sales growth of $40 billion with this move. Distribution is a challenge, and new ways to use these products and their design for low price markets and local customer habits is needed to make this a success. Families that don't use diapers are encouraged to start using them only once a day at night to promote restful sleep, and young girls are introduced to feminine hygiene pads. Shampoo is in tiny packets for 1-2 uses and may cost no more than an egg. Even though this puts P&G in head on competition with better established Colgate and Unilever, P&G executives see the efforts of all 3 companies actually helping to educate the people in using these products and broadening the market for all. ...

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Prof. Neera Chandhoke of Delhi University points out that Jawaharlal Nehru and other leaders of the Congress made great contributions for India. First in the freedom movement and then in helping India take the first steps to modernization. During the early years India needed the leadership of Nehru and Gandhi to establish a functioning democracy. Even though the focus has shifted to the economy and the next steps in modernizing the economy, the contribution of the early years should not be forgotten, as it laid the basis for what happened later.

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In China since 1981 the poorest people making below $1.25 a day fell to 207 million in 2005 from 835 million in 1981. In India the number of people below $1.25 a day increased to 455 million in 2005 from 420 million people in 1981. The share of the people in poverty fell to 42 percent from 60 percent during the same period. Corresponding figures for East Asia including China show a drop from 80% of the people in poverty in 1981 dropping to 18% in 2005. The proportion of people living below the $1.25 a day poverty line worldwide fell over the nerarly 25 year period from 1981 to 2005 from 52% in 1981 to 26% in 2005. In subSaharan Africa, now the poorest region half or 50% of the people live under the poverty line of $1.25 a day in 2005 almost where it was in 1981. In absolute numbers the region had 380 million people living below the poverty line in 2005 compared to 200 million people in 1981. Note that the World Bank this year changed the poverty line from $1 to $1.25 a day, to make allowance for the inflation that is hitting the poorer countries. Is China a rich nation after the Olympics? Some parts of China, the coastal regions and the regions around big cities like Shanghai and Beijing are relatively affluent with pockets of poorer people but in the rest of the country there is poverty as defined perhaps in terms of deep poverty, poverty, poor middle class without health insurance or any kind of savings for emergencies. With 200 million people in 2005 below the poverty line a question could be asked how many people in China below say $2.00 a day which could be seen as being poor at a time when inflation in food and fuel costs has been significant in developing countries. If its somewhere in the range of 300 and 400 million people in China this explains why in relative terms China would identify with India and the rest of the developing countries and it also explains its stand in the WTO trade talks acting as a developing country protecting the rights of agriculture and farmers within China. And it also explains the reasons why China sees a long transition before it ceases to be a poor developing country and why there is real concern that these 300-400 million people as well as others adversely affected by the rapid industrialization and exercize of state authority, corruption and increasing gaps between rich and poor, adverse effects on environment, that these people adversely affected are listened to and accomodated in the interests of stable progress and fairness. Much of recent history has shown that countries open to foreign trade have done better given the right conditions and careful policy measures. China opened up around 1981, and India around 1991. Also progress and gains are more significant in infrastructure building and in poverty reduction in the latter phases of development as the synergies increase, capital pool increases, and the development accelerates, this shows why China's gains look significant compared to India's at this point in time. In ten years or fifteen years a better assessment could be made and then some points may favor China and some India, and the results will be a result of different history, experiences and problems faced and routes taken because of prior developments in each region and varying complexity. ...

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The NYT editorial saying that it was Republican ideology and interest in turning over the financial institutions back to private investors as quickly as possible that played against the sensible idea of the government injecting capital directly in exchange for ownership stakes that it would eventually give up to the private sector. The Gordon Brown Plan in the UK amid a worsening global crisis may have turned Paulson and Bush's mind to favor a similiar approach but a lot of time has been wasted in the process, triggering a worldwide crisis of confidence from the US to countries that were for the first time making progress in reducing poverty like Brazil and India, and esssentially to all parts of the world. The failure to address the problem directly in this manner in the first instance right after the collapse of confidence in the early days of October, and the lack of a backup plan of this type instead of the complicated reverse auction buyout of securities backup plan of Paulson, may have already damaged a lot of institutions and with the fall of Lehman set off a crisis of confidence across financial markets worldwide. ...

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With so much coverage of other aspects of China,  to really understand China and Xi Jinping one has to understand the rural urban situation in China. Xi's long experience as a teenager in the cultural revolution of Mao was in rural areas, the 8 years he spent there till the age of 22, as this report by James Areddy with help of Yijun, Cheng and Qi aptly shows. It traces the shift and mass migration to cities starting with Deng's modernization drive in 1979. This shift of labor to city and town factories as the U.S. and Europe shifted factories and production to China is the story of our times. How it has both helped and hurt China and how it has become the dominant issue of our times, and a lesson for India in the middle of its own modernization and shift of labor to cities. It has helped China modernize with the shift during 1979 to 2016 and run into a road block with president Trump leading a movement in the U.S. of people most hurt by the outsourcing of factories and production to China. It was not meant to be this way. Yet the shift also led to ripping up the fabric of communities and towns with loss of factories across America over three decades. Because China is a large country the impact was huge decade after decade, leading to a backlash against lost jobs in the U.S. and in Europe.  Xi Jinping has romantic view of rural China as he spent 7 years in Shanxi province rural areas during the cultural revolution under Mao. During this period he toiled as part of farm labor alongside villagers which allowed him to get to know villagers and farmers in the countryside well, and formed his view of the world around him. As it is described in a description of the man in Chinese sources- "He arrived at the village as a slightly lost teenager and left as a 22 year old man determined to do something for the people."  China's system separated migrants from city dwellers not  giving same rights to better education, to schools and housing, and official documents separating the two, city dwellers and migrant populations from rural areas. As a result as China modernized and population shifted -shown here in excellent graphic charts over four decades- in 1979 from about 80% in rural areas and 20% in urban the shift goes to 50-50 by 2001. Today it is 40-60 with 60% in rural areas but a population of 40% suffering from severe inequalities and  low incomes. So that GDP per capita of $10,000 for China is deceiving. The real incomes in average disposable income is about $4300 in urban and $1700 in rural area, according to National Bureau of Statistics. High school education is hard enough to get in rural areas, medical care is very basic and the $1700 would hardly get a room in low income housing in a large town in China, says premier Li Keqiang. Keqiang did his masters thesis on urbanization and has studied this shift from his college days. Just as in Gandhi's India, Mao's China is the story of the villages, with 128,000 villages for 600 million people in Mr. Xi Jinping's anti-poverty drive. Hong Kong other issues have to be understood in the context of these concerns of China's leadership today- the sense that strong central leadership alone can keep the country together and bring a decent life to the people in the villages and in the countryside outside the cities.  Modernization of cities still set in the context of China's vast rural population and essential to its full uplift and progress. Xi has allocated $80 billion each year to bring roads, schools, medical facilities, and other amenities including electricity and modern heating. The idea now is to shift people back to the villages, find opportunities for jobs and livelihoods in farming, tourism with guesthouse facilities, and other occupations in the villages. The villages are being turned into attractive places to live one by one in this party drive and providing new enthusiasm and support for the party's efforts. India can learn from this experience in China. The western nations of the U.S. and Europe can no longer and will no longer undertake the wholesale shift of factories with loss of jobs to China or India to offer the prospect of bringing these countries to the kind of urbanization and overall prosperity of small nations like Japan and South Korea, which are a tiny fraction of the population of China and India+ Pakistan + Bangladesh. As a result China is changing strategy now with a return to some aspects of the informal economy in Chengdu with street peddlers and tiny retail, and return of migrants back to better built and improved villages in the countryside. A better life than in cities is possible this view says for people from these rural areas, if the rural areas are given modern facilities and construction and resources are allocated, job creation locally tackled. The villages can offer better air quality, better quality of life where villagers who earlier migrated to cities with ownership of land, when they are modernized with better roads and have better facilities for education, housing and healthcare, better amenities. The new approach is to strike a good balance for urbanization, by modernizing and investing in villages and small towns, so that cities can cope and overall life can be better than with mass migration and wholesale urbanization. It is also a balance that works well for the U.S. and Europe which can redirect manufacturing to their home regions as part of a better distributed and balanced supply chain than the one that was unwittingly built over the last three decades.    ...

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Emmerentze and Germano provide this exceptional look with wide ranging interviews at a brand which has failed to make headway in the U.S. market for 2 decades, after being a prominent brand in the 70's and slipping ever since. Adidas share price declined by 38% in 2014, declining to 57 euros, recovering to 70 euros by March 2015. The economic crisis in Russia affected Adidas sales. A major problem area is the U.S. market where Nike has made major progress, and other competitors such as Under Armour and Skechers are rapidly increasing market share. Adidas is now No. 3 behind Under Armour in retail sports apparel and footwear sales, according to Stern Agee and SportsScanInfo. The U.S. operation has been tightly controlled from headquarters in Herzogenaurach, in a rural part of Germany. During CEO Herbert Hainer's leadership since 2001 share price quadrupled but the U.S. operation has languished, because say retail experts the operation does not reflect the culture savvy management style of Nike and other U.S. competitors. U.S. sales are 43% of the global athletic apparel and footwear market, and the global market of $51.6 billion moves in relation to fashion trends set in the U.S. market. CEO Hainer and managers in Germany are seen as very focussed on spreadsheets and analytical approach to sales in over 100 countries. The only design studio outside headquarters in Portland, Oregon, was setup in Brooklyn, N.Y. recently, and the 4th CEO during Hainer's leadership since 2001 is the first to be given some degree of autonomy in making design and marketing decisions. Nike's market share in athletic footwear has increased from 35% in 2005 to 47% in 2014, as Adidas remains stuck at about 10%. The Reebok acquisition for $3.8 billion in 2005 is seen by U.S. Adidas managers as a distraction. Retail store executives visiting Germany say Adidas product cycle from design to product introduction of 18 months was just too long to meet the rapidly changing preferences in the U.S. This is now being cut to 6 months. In recent years Adidas has expanded rapidly in emerging markets but management has failed to grasp the fact that trends in growing markets such as China, India, Brazil and Mexico are set by pop culture trends in the U.S. ...

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A major shift in foreign investment may be taking place as the 2014 St. Petersburg International Economic Forum takes place in May 2014. Russian policy in Ukraine and tensions with the U.S. and Germany could lead to a shift in investment to other emerging market countries. China's tensions with Japan could lead to a similiar shift of Japanese foreign investment. At the same time India has elected a new government with an absolute majority and an overwhelming mandate from young people to accelerate development. The new government under the BJP party's Modi has a decade of experience attracting foreign investment in western India. Indonesia, Vietnam, Africa and other emerging market countries, could benefit from the shift in investment. Investment could also return to the home countries with lower labor costs in Southern Europe, lower labor/energy/transport costs in North America. For Russia the debate at the St Petersburg Economic Forum was about pursuing one of three policy paths with some riskier than others, or some combination also risky and uncertain- depending on state banks and oil windfall funds, increasing ties with Asian countries, continuing on the current path with lower foreign investment and continued capital outflows. The failure to use the time wisely to diversify the oil based economy which could have been better accomplished in an economy not overly dependent on crony capitalism and centralized economy, both current characteristics, will affect future progress. A key weakness for Russia compared to China is the centralization under one person Putin, more so in the third term. In China the two man team Keqiang and Jinping is part of a larger team chosen by consensus and negotiation and part of a rotational scheme. It has senior leaders who initiated the changes to a market driven economy in the nineties determined to see China on track....

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Musharraf's efforts at economic growth were not broad enough or deep enough to create a measurable difference in the lives of the Pakistani people. And improvements in industry and agriculture may have been shallow compared to the potential. The wars or conflicts one or the other with India and the failure of political leaders may have been too big a distraction to achieve the significant effort needed to make a serious improvement in the lives of ordinary people and grow the middle class. Inflation is up by 24% year to year in July and rising, which is really an intolerable burden in a poor developing country. Now what little progress was made in Pakistan for the lives of ordinary people and the middle class is unraveling in the face of increase in the price of food, and fuel. And the the fall in the value of the Pakistan ruppee to Rs 75 for one American dollar, a 24% decline in value since January 2008 in only 8 months, shows a serious loss of confidence in the economy. The fall in the foreign exchange reserves is striking from $16 billion in November to $9.92 billion at this time. Pakistan appears to be heading in the direction of a serious refocussing of its economy, its politics, its educational institutions, and government and private industry, and its military in the direction of improving the lives of ordinary people, building industry and agriculture and building its infrastructure. If left unattended this crisis can only get worse and none of the past experience the old military approaches, the religious politics, the corruption in politics, the old political slogans, the conflict building with India, is going to be of much help in tackling the real day to day problems of improvement in industry, agriculture, infrastructure, and building better lives....

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This WSJ report looks at how China is run today with attention to details by president Xi Jinping. Mr. Jinping takes interest in all matters that relate to wellbeing, reducing gaps in wealth and privilege, coronavirus pandemic, corrupt businessmen or officials, climate change, and the economy. Some decisions have to be reversed after they appear not to be working. In some situations goals conflict such as climate change action on coal requiring shutting down intensive coal dependent factories, and economy jobs goals requiring use of coal intensive factories. Leading to a complete reversal of the original decision to cut back on use of coal as happened in 2021 when factory shutdowns affected the economy.  Jinping does not see it as micromanagement. Previous leaders such as Hu Jintao had little interest and did not put in the effort to seek out areas where policies were not working for families and workers, delegating this to lower level officials. Jinping's style is hands-on and energetic to act on issues that affect how China should be run so that the quality of life of ordinary Chinese is improved. Jinping says that if he did not take action there just is'nt the level of initiative on the part of local officials. Many officials are not competent to tackle complicated issues. Jinping says that "some officials only act when the central party leadership has instructed them to do so." And that he acts as a last resort- "I issue instructions as a last line of defense." His willingness to reverse decisions or let them be implemented with local officials using their discretion if he thinks that would be wise also shows a level of flexibility and humility. Basic to his decisions is a general idea that the original vision of China of the founding leaders in 1948 was forgotten in the headlong rush to modernization of the last 20 years. This means a balance was needed to restore some measure of equality and empowering of the disadvantaged. Xi Jinping's father was one of these founding leaders under Mao and under premier Deng during the market economy founding in the 1990's. Xi Zhongxun, Jinping's father was an energetic leader who also took a keen interest on a whole range of issues for China's modernization drive, a trait now found in Mr. Jinping. The first market economy experiment was done under Xi Zhongxun with premier Deng's encouragement. Xi Zhongxun set up the Guangdong and Shenzen special economic zone in 1979, as governor of the province in an effort to liberalize the economy and slow the exodus to Hong Kong. At the time wages in Shenzen were 1/100 of wages in Hong Kong. Some of this style can be seen in India with Mr. Narendra Modi delving into details of policy and taking intitatives that local officials had neglected to do on a whole range of issues related to modernization, development and technological progress. One of the decisions made by Jinping was to tackle Covid aggressively with a zero Covid policy, which means frequent lockdowns and restrictions even with a few cases. Mr. Modi has also acted vigorously on Covid after warning in March 2020 that this could set India 20 years back, with a policy to get over a billion people fully vaccinated. In both situations the only two countries with over 1 billion population needed this kind of strong leadership with an interest in a whole range of issues that relate to lives of ordinary people during the pandemic to inspire some essential level of public confidence and build public wellbeing.     ...

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Lt. Gen Trainor and Michael Gordon describe the situation during the last months of U.S. presence in Iraq. President Obama is ambivalent about the size of the military presence he would like to leave, settling for 3000 troops and a few F-16's from a inital figure of 10,000. Obama sees the presidential election approaching and sets an objective of keeping it minimal. The military cooperation treaty with Iraq has to be approved by a Iraqi parliament with different factions in parliament not likely to approve it. Prime Minister Malliki decides not to move ahead. In the end no military cooperation treaty is signed after 8 years of war and a date is set for a complete withdrawal. Iraqi airspace is used by Iran to ship supplies to Syria's Assad regime, and the U.S. has less leverage in the region as the Arab world goes through a transition to popular government and elections. The Obama administration shifts most of its attention to Afghanistan where the U.S. has no vital stake in the long run compared to the Middle East region, with its large population, growing economies, move towards democracy and meeting the aspirations of hundreds of millions of young people. One Middle Eastern leader says the U.S. had no long term policy under the Obama administration for Iraq, and this applies also to the rest of the Middle East region, and mostly reacted to events as they happened. The Obama administration's committment to the war in Afghanistan, just as it focussed on winding down the war in Iraq, responded to the American public's waning support for the war in Iraq. It did not reduce the total cost of the conflicts because of the initial escalation of the war in Afghanistan and later slow progress towards a negoiated settlement to that conflict. A negotiated settlement is the best the U.S. could achieve, and the best desired objective considering the limited interests in Afghanistan. In Afghanistan most of the dynamics would be determined in the long run by the situation in Pakistan, and India-Pakistan relations, which the U.S. could influence constructively only through dialogue, promoting cooperation between the two countries, and economic relations....

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India's current account deficit of 4%- with imports exceeding exports of goods and services- and its small foreign exchange reserves of $293 billion as of April 14, 2012, place serious constraints on building a sizable energy fund to support additional imports of coal and other energy supplies. India is facing severe shortages of coal for the power industry. This places constraints on the country's growth rate. Finance Ministry officials and members of the Planning Commission are looking at setting up a $10 billion energy fund for securing additional supplies of crude oil and coal. Energy imports are placing a strain on India's finances and even the relatively small fund will need money from energy companies in the private sector.

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The South China Morning Post, SCMP, looks at China at the 40th year of the great economic experiment  that changed China. This started with the Deng reforms by the then Chinese leader that opened up the economy in 1978. As this report points out in 1978 Deng Xiaoping's efforts at loosening the state control of the economy and business was actually a way to get out from the effects of the Cultural Revolution and prevent another Cultural Revolution. Deng was removed from office during the Cultural Revolution. Instead of unquestioned acceptance of Mao the new criterion was "Practice is the Sole Criterion for Testing Truth." In economic and business matters this was followed so that if it worked then the experiment was expanded, gradually giving life to the Chinese model of state capitalism, economic expansion under the state with the state supporting state corporations that operate in a market economy.  This means the Communist Party was to continue its control but with experimentation away from the planned economy in the coastal provinces of Guangdong and Fujian, and then into Shanghai. Experts close to Jiang Zemin, the next leader after Deng, say China's Communist state would not have survived without the changes started by premier Deng. Farmers still did not own the land but they were free to plant and own the yields for their efforts.  Deng established the Three Benefits Principle in 1992 trip to Guangdong, whatever helped increase productivity, increased the strength of the country and improved living standards was good, you did not judge it by whether it was socialist or capitalist. Jiang Zemin's work was to follow Deng's ideas and help negotiate the entry into World Trade Organization and set up the new economic regulations. Capitalists were allowed to join the Communist Party for the first time. State and local government ownership of land was turned into an advantage as this provided one of the critical inputs in terms of land for setting up new factories, with capital coming from savings, and other inputs of technology and investment coming from the U.S. after entry into the WTO brought American and European companies to China. A steady supply of labor poured in from the countryside and urbanization became a goal of Chinese development policies. Today India and other countries in Africa, Latin America, can look at the Chinese experience and effort and look for ways to modernize, urbanize and improve living standards, productivity and strength of their economy. One key is to experiment and look for what works that can then be expanded to other locations, and build on the advantages that may open up as the experiment makes progress. Following entry into WTO China was able to take advantage of overseas markets and build an edge in manufacturing, something that was not evident even in 1992.   ...

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Credit Suisse research of loans at 3,550 nonfinancial services companies in India with total borrowing of $385 billion as of March 31, 2011, shows 30% had net debt more than six times current earnings before interest, taxes, depreciation and amortization. This is an increase of 50% in 5 years. Goldman Sachs estimates gross nonperforming loans including restructured debt will climb up to 6% of total loans in the next financial year. This is an increase from the 5% in March 2011. The Reserve Bank of India's stress test report of Dec. 2011 forecasts 5.8% of non-performing assets in a worst case scenario. This is twice the current level. This is largely a result of Indian banks increasing lending after the 2008 global financial crisis, with the worst affected and leveraged sectors being private airlines, construction companies, utilities and real estate developers. At the same time prudent regulation has ensured a capital to risk-weighted assets ratio according to RBI of 13.5% at the end of March 2011. This compares with the same ratio at 14.5% as of March 2010. Additional risks come from declining economic growth. Industrial output in October 2011 was down 5.1% from the prior year. ...