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The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

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This report in DW.com discusses the quick rise of Annalena Baerbock, 40 years, to the co-leader role with better known Robert Habeck, 51 years, at a party conference in 2018. In the winter of 2019 she was supported by a huge 97% of delegates at the party conference, with Habeck getting 90%. She has an advantage in foreign policy issues with her education in England at the London School of Economics, where she studied for her Masters degree in International Law. She speaks fluent English, rare in German politics. Baerbock spent 1 year in the US when she was only 16 years old. Very useful now with changes in Europe, the US and India. Boris Johnson in Britain, Biden in the US, and Modi in India, all speaking English.  She has spoken up against xenophobia, and being from Potsdam in the east is able to understand issues facing East Germany. A big change Baerbock says happened in 2019. Then she and Habeck decided to open up the Greens to become a big tent party that welcomes people from all sides. This was a smart choice at the time as Germans moved away from the two main parties- the SPD and the CDU. Dismay from the Schroder years when working class issues were ignored, and dissatisfaction with the Merkel years when investments in infrastructure, social care, health, education were neglected.  AfD support has stalled with the end of the migrant crisis and immigration no longer an issue. Baerbock says today of that 2019 party conference- "What we knew then was that we wanted to open our party up, that we wanted to make policies for a broad society: inviting and with clear objectives. Here today I want to make an offer, for the whole of society, as an invitation to lead our diverse, strong, rich country into a good future." Key changes that could happen in Germany in 2022- Phase out of coal powered energy by earlier date than 2038. No support for increased defense spending. Yet this is not likely to be an issue with the new American Biden administration. Infrastructure and vital investments in health and education would become a top priority similar to the US, UK and India. Careful policy coordination by Germany with the US, UK, France, India and Japan, and other EU nations, as the world shifts into a period in which lessons learned from the pandemic and the last three decades lead to renewal of supply channels and renewal of societies.   ...

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The US sends aircraft carrier group of the US 7th fleet with the aircraft carrier USS Reagan and destroyers on a freedom of navigation mission through the South China Sea. What is a freedom of navigation mission and what is the US goal? "Our presence in the Pacific is to demonstrate our commitment to a free and open Indo-Pacific," says commanding officer of the aircraft carrier USS Ronald Reagan, Captain Fred Goldhammer. Seen on a map the Paracel Islands are far from China's coast. They lie on the waters further south in the South China Sea closer to the coast of Vietnam and between Vietnam and the Philippines. Till 1974 the Paracel Islands were part of Vietnam. In that year China took control of these islands after a war with Vietnam. The name Paracel is of Portuguese origin on maps in the 16th century. There are 130 islands or reefs with total area of about 3 square miles spread out over about 6000 square miles of ocean in the middle of the South China Sea near the coast of Vietnam. The French had  weather station there in 1932. After independence South Vietnam controlled the islands. In 1974 the islands were taken over by China from Vietnam. The result is that by taking over the islands China put itself in the position it is in Tibet. In Tibet it has put itself right across the Himalayas in a position that interferes with security on the border with India in the Himalayas that for centuries almost going back to Buddhist times 2500 years ago had very little and most of the time no Chinese presence. The passes in the Tibetan region are at heights over 15,000 feet that were mostly inaccessible except by yaks and other animals for transport for most of the 2500 year period. This is true also of the Paracel and other islands in the South China Sea as they are right in the middle of the seas of open navigation used by traders before the coming of the Europeans and for ocean going trade since 1500. Britain and the US have enjoyed free and open navigation in these oceans which connect past the Philippines into the Pacific to the Japanese islands and on to Hawaii and the US Pacific coast. What the US and European allies are saying is that the free and open navigation of the seas has always been the case for the last thousand years in the Pacific. The taking of the islands in 1974 by China from Vietnam now put it up against the US and European allies, and their Asian allies, as it interferes with navigation in the open seas essential for trade and travel between Asia and the Pacific. This is how the Chinese invasion of Tibet and the taking over of the Paracel Islands have put China into the position of interfering in the normally open and free areas in the Himalayas and the Pacific. This is where the Quad group shares a common interest in preserving what always existed in history-  a free and open Pacific and a free and open Himalayas. It brings together the US, Japan, India and Australia which stretch all the way from the Himalayas and the Indian Ocean uninterrupted all the way through Indonesia to Australia and Japan and the US. From the Mediterranean through Egypt into the Indian Ocean all the way to the Pacific and the US keeping free and open seas for trade and navigation. Or across the Cape of Good Hope into the Indian Ocean and the Pacific to the US. ...

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The firing of John Bolton as National Security Adviser opens up the possibility of a meeting of Trump with President Rouhani of Iran. There is a need for both sides to begin talks on a nuclear deal that would replace the one Iran signed with president Obama to address issues raised by Mr. Trump and Republicans. Iran and countries that buy oil from Iran such as India, China and Japan have an interest in relief from sanctions imposed by the Trump administration on imports of Iranian oil. The European Union is keen to preserve aspects of the nuclear deal. Relief from sanctions is critical for Iran to develop its economy. The last two decades have seen Iran struggle to develop its economy with the sanctions imposed by  different U.S. administrations.   President Trump expressed flexibility on sanctions saying "we will see what happens. I think Iran has potential. They are incredible people." President Rouhani urged Mr. Trump "to put warmongers aside." Mr. Trump told reporters that he had resisted Mr. Bolton's opinions on issues and realized he had moderate views when compared to someone like Bolton.  Trump told Iran "We are not looking for regime change. We hope we can make a deal and if we can't make a deal thats fine too. But I think they have to make a deal." Helping the U.S. and Iran come to talks is president Macron of France who hopes to setup a meeting at the UN General Assembly which meets next week following his efforts at the G-7 meeting in France last month. In the past when tensions were high in the Straits of Hormuz President Trump refrained from aggravating this by saying actions that are "disproportionate" should not be taken and respected Iranian intentions. The tone of the conversation between the two sides has moderated to the point where both sides realize the need for coming to some compromise. This is in sharp contrast to the period a few months ago with rising tensions in the Straits of Hormuz and the seizure of an Iranian ship. Bolton's opinions were not the only issue for president Trump. He was also seen as the source of leaks including one that said Mike Pence, the Vice President, had opposed Mr. Trump's plan to bring the Taliban to Camp David. Also contributing to the new climate for talks is Mike Pompeo the Secretary of State, who has promoted the idea of talks with Iran. He told the media about such a meeting at the UN General Assembly in New York- "Sure. The president has made it very clear that he is prepared to meet with no pre-conditions." The willingness to try new ideas even contrary ones to policy pursued only a short while ago as long as the desired goal is reached is a feature of this presidency and key advisers. From the beginning of the Trump administration there is a firm sense of the need to end the wars in Afghanistan and Iraq. and reduce foreign entanglements that have dragged on wasting resources and destroying priorities. With a willingness to try all sorts of approaches even ones that appear to be contradictory always keeping the end goal in sight. ...

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A rapid increase in the number of Russians with favorable views of the US going up past 30% as one sign of the effort to improve US Russia relations by Trump and Putin is seen in March 2025. A call by Trump to Putin will take place March 18, 2025 to start discussions on how to settle the Ukraine conflict including land, power plants and exchanges and getting to the root cause of the war- NATO expansion. Some solutions include NATO being disbanded in its current form as archaic as there is no Soviet Union, its original goal being stopping Soviets from setting pro- Soviet governments, setup in Czechoslovakia and attempts to do this in Greece and Turkey. Truman formed NATO for this purpose in 1949 after the Berlin Blockade by Soviets. WIth nuclear arsenals being replenished in Russia and China, India, Japan, small nuclear states such as North Korea, Pakistan, the situation is different today with responsible policies needed today on this issue which are impeded by the idea of NATO on the borders of Russia and the Eastern European and British view of Russia as the pre-eminent threat not shared by India, Brazil, China and the new administration of DJT in the US. A long period of peaceful coexistence and arms control developed in the late 1960's, 1970's and 1980's between the US, German Federal Republic and Soviet Union/ GDR Germany. ...

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A new survey of senior lending officers of 45 emerging market banks by the Institute of International Finance is similiar to surveys done by central banks in U.S., Europe and Japan. The IIF is an asssociation of large global banks. The IIF's chief economist says the survey shows strong demand for loans in these countries. Emerging market banks are becoming cautious, but its difficult considering the strong demand for loans. In China and Brazil, banking authorites are trying to cool the huge increase in loans as asset bubbles are developing. The IIF's first survey shows strong demand for loans aross the board, especially in Brazil. Similiar information from Turkey shows strong loan demand. An index of loan demand for consumer loans in emerging markets- with a score of 50 indicating expansion of loan demand and below 50 contracting loan demand- is at 64.1. Similiar indexes for the U.S. are at 50.1, for Europe 49.8, Japan 48.5, according to the recent surveys by central banks. While 56% of emerging market banks say corporate loan demand has grown in the 1st quarter 2011- the similiar number for the U.S. is 35% in the Fed survey, and 28% for Europe in the ECB survey. The IIF survey looked at the bank's lending practices and found banks in emerging Asia were tightening standards while banks in Eastern Europe, Latin America and the Middle East were lowering the standards. 25% of emerging market banks tightened corporate lending standards, 16% relaxed standards, and the remainder left things as they were. A similiar Fed survey for the U.S. showed no banks tightening corporate lending standards, and 16% relaxing standards. And an ECB survey shows more banks tightening standards than relaxing them....

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Iraq's oil ministry wants to move ahead faster in developing its oil fields and will let foreign oil companies bid for contracts to develop 6 oil fields and 2 natural gas fields by end of 2008. About 40 foreign oil companies from USA, Europe, Japan, China, Russia have been approved for bidding on contracts. According to BP PLC statistics Iraq produces 2.5 million barrels a day, up from 1.9 barrels a day last year, but far below the 3.5 million barrels a day produced in1979. The Iraqi goal is to produce 1.5 million additional barrels a day, but obstacles are the lack of a hydrocarbon law which is not moving quickly, and the Kurdish region signing its own deals, and this announcement may be an effort to go ahead and not wait till a hydrocarbon law is passed and sign agreements which would be technical service agreements for foreign expertise for a fee. Oil revenues are helping stabilize Iraq and as security improves oil can be a big stabilizer with increased production and financing development and job creation and building infrastructure damaged during the war and infrastructure that never existed....

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...

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Neil Irwin in the NYT why the U.S. China Phase 1 Trade Agreement is more than a hill of soyabeans as he puts it, more than about all the soyabeans that the U.S. farmers can sell to China. China's economy was seeing the effect of U.S. tariffs. Additional tariffs to cover all imports from China to the U.S. would have worsened this. China avoided this by agreeing to Phase 1. The U.S. had looked for some enforcement mechanism based on China putting this down in a written agreement particularly for avoiding subsidies to state enterprises and improper access to U.S. advanced technologies. China's reluctance to do this led to Mr. Trump saying that China had reversed its position and Trump expanding the tariffs stage by stage. These issues are now set aside for Phase 2 still to be negotiated. Both sides taking what they could get. China relief from the threat of tariffs on all exports. The U.S. under Mr. Lighthizer's negotiating leadership retaining the enforcement idea through the tariffs that are still in place of 25% on half of China's exports to the U.S. The bonus for Mr. Trump is the goodwill China generates by agreeing to buy all the U.S. farmers can produce, farmers having not only stood behind Mr. Trump but also forming a key part of his support base. China will continue to compete in technological areas with the U.S., and the state enterprise model which worked for China as Mr. Xi tells visitors will continue. Phase 2 is just that Phase 2, when and if it can be negotiated between Trump with his negotiator Lighthizer and Xi with his negotiator Liu He. On key points neither side is budging. A key goal for Mr. Trump is to put the trade surplus China enjoys of $300 plus billion a year with the U.S. on a serious downward path, and bring so many of the jobs and manufacturing back home. On this trade data for 2019 and the plan for 2020 of both countries is clear. It should be down each year by 10-20% for the next few years, a major achievement of Mr. Lighthizer, who did the same with  Japan under president Reagan. ...

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Problems facing the energy industry in India include lack of coal supplies to use all of the existing electricity generation plants. Lack of investment and modernization in the coal industry is holding back tapping of large coal reserves. India is expected to see a huge surge in energy demand in the next twenty years, with the International Energy Agency saying India will need $1.6 trillion in investment in power generation, transmission and distribution through 2035, and $550 million investment in coal, oil and gas sectors.

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The failure of the northern electricity grid in India and the huge power outage in 8 states affecting 369 million people on July 30, 2012. This includes the capital city of New Delhi. The outage was a result of the northern grid taking more than its quota of power from the national electricity grid in India. Analysts say India has a shortage of about 10% of electricity needs. Over half of India's electricity generation capacity of 205 gigawatts is based on coal. Coal India which is the largest producer has failed to meet growing demand and the coal shortages are making it difficult to expand power capacity. The national plan is to increase capacity by 44% in 5 years.

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 President Trump says China is backing off in negotiations to address U.S. demands for a fair relationship on trade. He says the U.S. will increase tariffs from 10% imposed in September 2018 to 25% on $200 billion of Chinese goods starting May 10, 2019. China has put tariffs of 10% on $60 billion of American goods exported to China responding to the American tariffs in last September.  The U.S. says since China joined the World Trade Organization in 2001 with the approval of president Clinton it has unfairly benefited in trade with the U.S., leading to closure of factories and loss of jobs in the U.S. with state subsidized Chinese exports to the U.S. contrary to the spirit of the WTO and its rules. China has made promises to correct this and not kept them says the U.S. side in negotiations led by Robert Lighthizer. The tariffs moves are a tactic of president Trump to get China to relent and make fundamental changes in the way it exports to the U.S.  So far the Chinese response has been tit for tat. But this can change. As this report points out what is already known that China benefits far more and exports far more to the U.S. than the U.S. does to China. The $60 billion of American goods exports on which China placed tariffs represent two fifths of China's imports from U.S. With smaller exports from the U.S. to China, China has not much leverage in trade negotiations in this kind of tit for tat retaliation. It hurts China's exporters and economy much more than it does U.S. consumers. The increase in prices for U.S. consumers are also not expected to be significant, according to this report in the NYT, if China increase tariffs further. Aware of this and China's belief that past administrations have not responded is a guide to what the Trump administration can or will do, has convinced president Trump that there is no other way to get a fair trading relationship that respects U.S. interests, its jobs and workers. As Robert Lighthizer who leads the U.S. negotiating team faced this type of response from the Japanese when he negotiated with them (shoving off U.S. demands to reduce Japan's trade surplus in the eighties before accepting them), the U.S. thinks this strategy will work again. In any case it sees no alternatives to achieve its goal of a fair and balanced trading relationship. The U.S. international trade deficit in goods was up to $891 billion in February 2019 even after the tariffs on Chinese goods in September, showing that it will take a lot more to turn this as well as other trading relationships around.   ...

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Huaneng Power China's largest power utility company announced that electric power generation went up by 40% in the 1st quarter of 2010. Datang International Power said its electric power output was up by 33%. Continual power plant construction has led to China building 80% of the new generating capacity in recent years. Over the next 10 years China plans to spend $150 billion or so to increase capacity nine fold- it already has 21 nuclear plants being built. Much of the nuclear plant building knowhow is being acquired along the way. The Lingao plant in Guangdong which was started in 2005 and will be completed this year, uses 50% local content. In the next unit to be finished in 2011 it will reach 70%, and by 2012 China expects to reach 100%, and gain the ability to export its knowhow.

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During 2012 and 2013 the U.S. put pressure on China and India to cut oil imports from Iran to increase the effectiveness of sanctions. As negotiations eased the sanctions, China increased oil imports in 2014 by 30% in 2014 over the prior year. China's Foreign Ministry sees a "win-win spirit" in the nuclear deal that opens up economic relations with Iran. Analysts say China has setup three new storage facilities on its eastern coast with about 45 million barrels of new capacity, which could be filled with new supplies as its growth slows and demand decreases. China's imports were about 7 million barrels a day in June 2015.

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Ghosn of Renault-Nissan used to be a skeptic about electric cars. Now he is on board. Nissan plans to sell an electric car in the US and Japn by 2010. It will be only hundreds of vehicles at first so it will take more time to take it to mass market, but the goal is to go for mass market. By 2012 Nissan will plan for a lineup of electric vehicles, so it will extend beyond small cars to small minivans and small commercial vehicles and small crossovers. 100% electric cars also are described as zero emission vehicles. But Nissan won't be the only company doing this. Mercedes is moving "very fast" in the direction of emission free vehicles, see the the interview with Daimler's Zetsche. Mitsubishi Motors and Fuji Heavy Industries are testing versions of electric cars. And GM plans to introduce the Chevy Volt in 2010. Toyota plans to have a plug in hybrid about this time. Mercedes will be the first to bring a lithium oin battery in its S400 coming out later this year which will be a hybrid. It is the cooling of lithium ion batteries that has been a major hurdle to development of electric cars and Daimler's Zetsche says they have solved this problem, have 24 patents, and developed a cooling system that works inside the car. Nissan has an electric car project that it is working on with California based Project better Place to produce electric cars for the Israeli and Danish markets. Ghosn has grasped the idea that the market is signalling a major and irreversible change towards smaller emissions and regulators are way behind on this curve. He says that if one is to sensibly participate in the growth of emerging markets which Nissan is doing in North Africa and India and Eastern Europe then one has to think in terms of sustainability and lower emissions, as putting tens of millions of more cars on the road around the world can damage the environment. And the only way this can be done to meet the aspirations of people in emerging markets is to lower emissions and to set this as the overriding goal. One gets the same sense from the Germans, see Zetsche, Daimler....

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This WSJ story shows how China started its steel industry from small beginnings when Chinese leader Deng visited a Nippon Steel plant in 1978. He made the decision to go big with Baosteel, with an investment of $6 billion, with the words- "if we do it lets do it big." This was 36 times the Chinese foreign exchange reserves at the time. From 4% of steel production, this went up and up, passing the U.S. in 1993, past Japan in 1996, and in 2018 producing three times the steel of U.S., Russia and China combined, producing 923 million metric tons of steel in 2018, or more than half of world production of steel. With steel China was able to build its automobile industry, shipbuilding, bridges, infrastructure, high speed rail network. This was done using global demand, subsidies from the government, cheap loans and tax breaks. Markets worldwide were affected by substantial excess production in China. From Baosteel the spread of the steel industry to all 23 Chinese provinces led to China accounting for 25% of world exports. By 2016 5 million workers mostly from the agrarian countryside were employed in the steel industry, helping China transform itself into an rapidly urbanizing and modern economy. It was a period when the rail network was tripled between 1975-2017, with shipping companies that ensured access to Australian coal and Brazilian iron ore. From 2011 to 2017 Chinese steel dropped global prices by 57% triggering closure of steel mills in EUrope and the U.S. About a third of trade complaints since 2001 by G20 countries against China are about steel. After entry into the WOrld Trade Organization Chinese steel exports rose to 8% of GDP from 2%. Subsidies, cheap energy, and shift of agrarian workers to cities. U.S. investigations around 2006 showed Chinese steelmakers subsidies covered 30% to 45% of the subsidized value of steel pipes exported overseas. China's steel prices were set 20-40% lower than the U.S. China responded to complaints saying it was trade protectionism. The WTO rules call for full disclosing of all subsidies. This was disclosed 5 years after joining WTO in 2001, and only for central subsidies. Local government subsidies were not disclosed till 2016- the U.S. says 15 years late. Still the Bush and Obama administrations failed to take action. In 2018 Mr. Trump seized on this as a campaign issue that resonated with American workers in manufacturing communities across the U.S. In 2018 November president Trump announced a 25% tariff on imports of Chinese steel. A six month probe by U.S. officials had already shown 40% of sales value came from subsidies for corrosion resistant steel from China. The U.S. Trade Commission imposed tariffs of its own from 39% to 241%, with the Trump tariffs of 25% coming as an additional tariff to tackle the trade surplus with China. Meanwhile in China the government is closing uncompetitive smaller steel mills and in 2016 it combined baosteel with Wuhan Steel to create a larger company, and consolidate remaining companies. Baosteel now provides the steel for CIMC to dominate the steel container business, and to make ship to shore cranes, and make the San Francisco-Oakland Bay Bridge.  It also goes to show what can be accomplished from small beginnings for countries in the developing world from Asia to Africa and Latin America, with government and industry focussed on development and growth.   ...

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Honda's market share slipped from 11% in 2009 to 9% in 2011 in the U.S. after the tsunami and earthquake led to shortages of cars. Sales are expected to be 50% higher in May 2012, as inventory shortages are reduced, according to Edmunds.com. With increased competition, and new models such as the Crosstour Accord in 2009, CR-Z hybrid coupe, Insight hybrid in 2010 failing to catch on, Honda is increasingly falling back on its best selling Accord, Civic, and CRV sport utility vehicles for increasing sales. The Ridgeline pickup truck introduced in 2005 may be discontinued. The Honda Fit subcompact sales declined by 61% in April 2012 from the prior year. Fiat and Kia small vehicles have increased sales compared to the Fit. The Fit is manufactured in Japan and the strengthening yen makes it unprofitable. A cost competitive Fit will be made in Mexico starting in 2014. Honda's strong point is its higher customer retention rate of 60%, second to Hyundai's 64% repeater ratio, according to January 2012 survey of J.D. Power. Honda normally relies on the U.S. market for over half its operating income, and for the year ending March 31, 2012 most of the operating income, 223 billion of 231 billion yen, was from the U.S., which gives some idea of how much rests on the U.S. market. For now Honda is using incentives to recover market share at the expense of operating profit. During the last fiscal year Honda's operating profits declined to 2.9% of sales. Honda's goal is to move this up to 6% in the coming fical year, still short of the 9% in 2002, and between Nissan's estimated 4.5% and Toyota's 6.8% in the coming year. ...

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What is the difference between South Korea and the U.S., Europe in the handling of coronavirus? It is tracking and testing.  President Trump and health adviser Dr. Fauci, see South Korea as the successful model to be followed in controlling the coronavirus. What has happened till now it is accepted with shortage of basic medical supplies and equipment, stress on hospital systems, are merely mitigation actions. South Korea was prepared for the coronavirus crisis because of the MERS and other epidemics, and failures resulting in corrective actions. Labs were centralized and better equipped for testing and tracking the infected. One of the key tools is testing. President Trump says the goal is for the U.S. to exceed and far surpass tests per capita in South Korea. Five million tests are planned by the end of April in the U.S. Where the U.S. falls short is in use of multipronged digital tracking using data from people's use of mobile phones, credit card usage, and use of apps designed to separate infected people from others. South Korea is a democracy with a population of 52 million people, about the size of France. People who were student activists in the democratization era in South Korea say the use of digital technology is a need today. We have to adapt in emergency situation they say. Ki Mo-ran, epidemiologist, and adviser to South Korean government says this is a key part lacking in the European and U.S. efforts to control coronavirus. She says in South Korea we know the patient's contacts, where he goes and stays, so we don't have to lock down everybody. Without digital tracking one cannot know which place is contaminated, which place is clean, so that there can be a lockdown of just that area and not the whole country, says Ki Mo-ran. She asks the question- is one person's privacy more important than the lives of a family or other people who are affected. Is it OK to lockdown every child in the country in a home as in Spain for over a month so that particular people's privacy is respected? These are serious questions for western society, are they exceptions or is democracy not just a western idea but equally cherished in Asian societies, people talk about Confucianism in China and the Asian culture forgetting that the biggest democracies are quite large and functioning well in India in addition to South Korea, Taiwan Indonesia, Malaysia, Bangladesh and Japan, far larger in area and population than China. The French government has chosen the app TraceTogether as the least intrusive one adaptable to France for use there. The U.S. is having Google and Apple develop one of its own. India will be developing one of its own. The NYT raises the question will it be watered down so much in France or in the U.S. and UK to be less effective than the  dire need for an alternative to lockdowns? ...

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Property sales are estimated to fall by 28-33% in China, twice as earlier forecast by S&P Global Ratings. This is a steep decline that will affect the Chinese economy so dependent on construction. This week there were reports of property buyers in 100 cities getting together to withhold payments on unfinished apartments. Property developers depend on these payments as they have severe liquidity problems and need cash for operations.

LyrArc Article Gist
There may be psychological hurdles in China's growth with the effects on mental health from lockdowns in major cities, the revolt in the property sector with home buyers losing confidence in developers, the loss of confidence of foreign investors from US and EU. The dependence on the property sector to carry so large a burden of growth for the last 2 decades in China may now look like an error. The dependence on foreign investment may also be an error as the loss of confidence could mean some withdrawal and a lack of sustained investment.  It could even be said that restraints on both sectors property and foreign investors could have created alternative paths to growth, and reduced the shift of factories from the US and Europe to China that have now caused trade friction and and a reverse shift of investment back to home countries of US and EU. Trade friction has it appears backfired in a way that extends to the overall relationship which could have been prevented by preventing the hyper growth that happened. Greg Ip of the WSJ has argued that compared to Japan's growth in the sixties and seventies from a country of 100 million the hyper growth for a country of 1 billion for 2 decades created a massive impact on communities in US and EU that were dependent on factories that were lost to China. This has alienated large sectors of the public in the US and EU which could have been prevented by restraints on hyper growth in China. Ip says the growth was too large and too fast for the US to cope. It may have permanently damaged the relations between the two countries showing that trade and globalization had unintended effects when left to business and governments staying away from keeping an eye on how it was happening. ...

LyrArc Article Gist
This report in WSJ says China's government faces severely strained government finances. Local government entities sale of land financed 40% of local government revenues in China, and most of these have dried up with the very real loss of confidence in property sector. Government now faces $900 billion in shortfall in revenues says this report. There may be psychological hurdles in China's growth with the effects on mental health from lockdowns in major cities, the revolt in the property sector with home buyers losing confidence in developers, the loss of confidence of foreign investors from US and EU. The dependence on the property sector to carry so large a burden of growth for the last 2 decades in China may now look like an error. The dependence on foreign investment may also be an error as the loss of confidence could mean some withdrawal and a lack of sustained investment.  It could even be said that restraints on both sectors property and foreign investors could have created alternative paths to growth, and reduced the shift of factories from the US and Europe to China that have now caused trade friction and and a reverse shift of investment back to home countries of US and EU. Trade friction has it appears backfired in a way that extends to the overall relationship which could have been prevented by preventing the hyper growth that happened. Greg Ip of the WSJ has argued that compared to Japan's growth in the sixties and seventies from a country of 100 million the hyper growth for a country of 1 billion for 2 decades created a massive impact on communities in US and EU that were dependent on factories that were lost to China. This has alienated large sectors of the public in the US and EU which could have been prevented by restraints on hyper growth in China. Ip says the growth was too large and too fast for the US to cope. It may have permanently damaged the relations between the two countries showing that trade and globalization had unintended effects when left to business which has no comprehension of how the macro developments can affect the relations between the peoples if the other effects in the relationship such as community impacts are ignored which business says is not its role,  and governments staying away from keeping an eye on how it was happening and adjusting for ill effects with restraint and redirection of business policies. ...

LyrArc Article Gist
China's manufacturing sector contracts in June with the PMI index dropping below 50 - to 49.0.  Exports were also coming in lower. Experts say the increase in interest rates by the US is reducing imports of Chinese goods into the US. This comes as local governments are strained in their finances by $900 billion, and a budding revolt is taking place from property buyers with developers in financial trouble, as reported in the WSJ. Psychological hurdles now loom in the loss of confidence in the public in the property sector, loss of confidence of foreign investors with many constraints in operating, mental health issues for the population in many cities with the covid lockdowns.   The growth has slowed to 0.4% and there is now a realization dawning that there was overdependence both on property sector and foreign investment that set up new factories offshored from the US and Europe that alienated the public in these countries. Unlike wih the situation of Japan in the sixties and seventies for modernizing its economy growth of the scale China was pushed into by misguided and self interested  business interests in the US including its investment banks and local government officials in China without restraint by the central government in Beijing, ultimately led to trade friction and permanent damage to US China friendly relations. Communities in the US and the EU simply could not cope with the hyper growth from hyper shift of factories from the home countries to China that pushed this hyper growth. The property sector played the same role in the domestic front with too big a burden carried by it resulting in hyper growth. This did not have to happen. It happened because of a lack of understanding that this would have consequences in the longer run which is now showing up. ...