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China's response to the delta variant of coronavirus and the difficulties it is facing.

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The $2.3 billion pounds (2.6 billion euros) the UK paid to the EU for not collecting legitimate customs duties for imports from China, could finance a UK travel pass like the popular 9 euro travel pass in Germany. That 9 euro pass was a sixth of the cost to travel in Berlin, one way the German government helped people face the cost of living crisis. It cost the German government 2.5 billion euros. One more missed opportunity in Britain by the Tory government to help people with the cost of living crisis. The UK gets hit first with a loss of the customs duties revenue that would have been collected as well as any penalties for fraud from importers. Add to this the $2.3 billion pounds in settlement with the European Union for not collecting legitimate customs duties from imported textiles and shoes into Britain from China. Blunders and missed opportunities to help people  with cost of living crisis is a mark of the Conservative government in Britain. The Guardian reports that the case goes back to 2017 when the EU anti-fraud office said British authorites had allowed criminals to evade customs duties by making false claims about imports of clothes and shoes from China. It says that the EU found over half of all textiles and footwear imported from China were below the lowest acceptable prices.  ...

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The title is misplaced- does India have an edge with development in Uttar Pradesh after many administrations since Jawaharlal Nehru's time in his home city of Allahabad. Can water and electricity, Jal Jeevan and Swacch Bharat (Clean India) make a difference in India's largest state. Is development for all impartially given, funds impartially allocated indifference shown to caste and religious lines for delivery of services by the state and federal governments? India and China were at about the same place in 1990 as both countries opened up- can India close the gap. Can Indians stretch the imagination to set stretch goals like China has done. Most of the Indians who fail to stretch the imagination fail to remember that Beijing was mostly filled with bicycles for transport during 1990. China remained undaunted in 1990, she persevered against all the odds. So must India. In the US and European Union competition with China it looks to India for restructuring the supply chain. Is Uttar Pradesh a good place for domestic and foreign investment? Water and electricity goals are being achieved in Uttar Pradesh. Fundamental to development is the rule of law, as this sets the basis for development. Adequate infrastructure, a clean India, is what creates a good climate for investment from outside the state and from other countries such as Japan, the US and Germany. Uttar Pradesh now has the potential to lead the way.    ...

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Kevin Rudd maintained a strong relationship with China when he was prime minister of Australia, He writes this piece in WSJ on the internal debate on policy taking place inside China at the China Central Economic Work Conference. Discussions are carried out in a vaguely referenced manner leaning to one side or the other in these dialogues inside Communist party circles since the 1930's. Here the discussion is on how quickly the idea of reducing social and economic inequality, or Xi Jinping's idea of a common prosperity should be implemented.

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Cordoba and Gurman cover the Justice Department case against Raul Castro, 94 years, of Cuba who runs the country. Jim Ratcliffe of the US government visited Cuba recently to let the Cuban government know that it had to make changes and there was a limited window. Raul Castro was defense minister, and is brother of Fidel Castro, the revolutionary who fought to overthrow the government of dictator Batista, made some short term improvements, but failed badly for the Cuban people with a policy that confronted the US and brought foreign powers to the western hemisphere. China could remain communist, keep Mao's memory, and adopt the market system, to develop the modern economy it has because of adopting western ideas, science and technology. And build what is otherwise a free market economy, and became a key trade partner, briefly an ally of the US as the Soviet Union collapsed- nothing like this happened in Cuba. Tourism was used simply as a way to protect the rest of the completely centralized economy and a state within a state built through an elite that ran a separate section of the armed forces under Raul Castro, kept a regimented society. Even that has failed. Nowhere in Latin America is there so many signs of failure, and it has also brought down societies that copied the rhetoric and nationalist slogans such as Venezuela and Colombia. In some parts of Mexico the Cuban rhetoric still sounds good but the reality is starkly different, Mexico itself is run on a model closer to that in the US, and Mexico has serious problems in civil society relating to immigration and drugs in its relationship with the US. ...

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This article from the John Hopkins University experts in Chinese investment in Africa say the charges that China was setting up debt levels for African countries beyond sustainability levels set by IMF are not founded except in a few instances. Only in Congo, Zambia and Djibouti does China account for over half of public debt, says the report. This comes as criticism is mounting about African countries being burdened with debt from Chinese financing of projects and loans.

In 17 countries identified as vulnerable including Ethiopia and Cameroon, China was the largest creditor but yet more than half of the debt was held by western banks and other lenders. In Mozambique it was Credit Suisse bank. In other words China is not preying intentionally to put countries into financial distress from debt buildup.

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Effects on mental health of the lockdowns in China for covid and personal stories of despair and helplessness.

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China's BYD started in electric batteries and expanded into electric cars. It has emerged as the dominant electric car company in the world as China now has half of the electric cars on the road in the world. 35% of exports of electric cars are from China. Keith Bradsher of NYT reports from Shenzen that its first car was made in 2007 of poor quality, similar to Toyota in the 1930's as it tried car manufacturing for the first time. It has surpassed Tesla in making electric cars. In each of the last 2 years it has increased electric car sales by one million to reach electric car sales on 3 million. EV sales in China were up in 2023 to 9.49 million cars giving BYD the largest share of 31%., by comparison US electric car sales were 1.2 million. New assembly lines are being built in Brazil, Hungary and Thailand. And new lines are planned for Mexico and Indonesia. This kind of growth was seen only by General Motors in 1946 after the end of the war. It also shows the progress China is making. In solar panels something like the addition of 900 million solar panels meeting the entire increase in electricity demand for each year, so that emissions targets can be met earlier than planned to tackle climate change.  The same changes are happening in electric cars. China now has 40% of electric cars or gasoline/electric plug in cars going up to 50%. For export China is building large carrier ships, the first that will take 5000 cars for export to the Netherlands. The lowest priced electric car model the Seagull was priced at $11,000. BYD's lowering of manufacturing costs have given it the ability to price the cars to attract new car buyers.  Wang Chuanfu who studied at Central Southern University in Changsha known for its battery research, was an engineer who started the company in the 1990's to make batteris for Motorola. Between 2003-2006 he experimented with making cars in the hope of making electric cars. Stalled efforts in 2009 and 2011 were met with arenewed effort in 2016 trying a new approach to cut costs by developing a battery where supplies of lithium or cobalt would not be a constraint. He developed a new battery using iron and phospate to replace lithium cobalt batteries. A big break came in 2020 with the Blade battery that increased range to the level of cobalt lithium batteries at a much smaller cost. BYD hired German Audi designers for new model design. This time BYD was in the right position to build a car company matching all others with costs lower by about 35% than VW for some models. This comes from- lower costs to make in China, making its own parts inside the company for 75% of parts compared to VW only about 35%, and by the savings from its battery research.  BYD has shown ability to shift with market needs and opportunities. In 2022 assisted driving was facing hurdles, BYD had second thoughts about the new technology, by 2023 as it was increasing in use BYD committed $14 billion in autonomous driving technology. Driving range is a problem for people in urban areas going back to their villages in China. BYD has an advantage here compared to Tesla- it makes hybrid plug ins that account for half its sales. Toyota has also had emphasis on hybrid plug ins where it missed the opportunity was that it moved very slowly on all electric cars not realizing how fast things were moving outside it's world. This is the situation America also faces in 2024 and beyond who can deliver on the infrastructure capabilities, new research ,and tap American potential to compete in this new world where one innovation will follow another. ...

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An official report after a 7 year survey finds 19.4% of arable land in China is polluted. The pollution comes for the most part from inorganic materials such as heavy metals cadmium, nickel which are byproducts of mining. Pollution is severe in the Pearl River Delta in the south, in Yangtze River Delta in the east, and in older industrial zones in the north east. Earlier efforts to get this data were stymied by some officials calling it a state secret about the time of the discovery of cadmium contaminated rice in Hunan province. China's 334 million acres of arable land, according to the most recent land survey at the end of 2012, is only 37 million acres above the minimum considered necessary to feed the large population, making this a major issue for China.

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Li Keqiang, China's new premier, is a member of the "Class of 77," who gained entry to Peking University when university entrance exams were reinstated after Mao's death. This is a period of great curiosity in China about the outside world. Li described it this way in 2008: "In this period knowledge was expanding with the speed of an explosion. I came here not just for knowledge, but to mold a kind of temperament, to master a kind of academic discipline." This he did by working extremely hard trying to master the English language and Western legal theory. He is now the only leader in China who can speak fluent English and is familiar with western concepts of law. For this he owes much to one of his professors, Gong Xiangrui, who studied at the London School of Economics in the 1930's and supported a multiparty system for China. Li was selected as one of the students to translate "The Due Process of Law" by Lord Denning, a British jurist. He spent the next 15 years in the Communist party's Youth League and moved up through the ranks. Many of the "Class of 77' " are still close friends and in academic positions in Singapore, Hong Kong and other universities. He understands the weaknesses in China's legal system because many of his close friends are lawyers, judges and law professors. Evidence of his intellectual openness, is his return to Peking University for a masters degree in economics years later, his thesis on urbanization, and his sponsorship through the Development Reform Commission think tank and the World Bank's Zoellick, of the report published in 2012, "China 2030." That report called for China to change course and reverse the role of state owned firms in the economy, giving consumers a bigger role. Like many of China's leaders this openness also meant during the period of turmoil of the Mao period and the decades following this, of a reticence to talk about political change that came over the entire country, in the words of the 2012 Chinese Nobel Prize Laureate's name, Mo Yan, a kind of "Don't Speak." Taking any kind of political position was simply too risky. The presence of 4 older Politburo members in their mid-60's who are close allies of former president Jiang Zemin and likely to preserve the status quo, also suggests a cautious approach in making changes. One key difference between Jinping- Keqiang from the Jintao-Wen Biao leadership is that Jinping has experience in provincial leadership positions in Hebei, and Keqiang was provincial leader in Henan, China's most populous province, as well as leader in industrial Liaoning province. By odd contrast Hu Jintao was a leader in the remote Tibet region and Wen Biao was a geologist in the northeast for many years. This gives the new leadership team a first hand knowledge of conditions in populous provinces, and the connections with the World Bank's Zoellick a kind of window to the outside that no other leader has had. Jiang Zemin, a former mayor of Shanghai, China' most westernized city in the 1930's and today, was himself a experimenter in his own right when he initiated the changes tht gave China entry into the World Trade Organization. His support of Xi Jinping gives Xi the needed backing for making change happen when the time comes....

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China's COSCO taking an ownership stake in Hamburg port was opposed by the Greens and Free Democrats parties in the three party coalition government with the SPD in Germany. Scholz of the SPD went ahead over their opposition saying this will preserve jobs in Hamburg port. In the compromise reached the ownership is capped at 24.99% so that no foreign country owns a majority stake. At one point Germany's cyber security agency BSI classified the Hamburg port as critical infrastructure.

China is Germany's largest trading partner  for 7 years with trade reaching a record $320 billion.

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

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Mercedes is seeing signifcant sales growth in China. It is Mercedes's third biggest market with sales of 100,000 cars compared to 67,000 in 2009. Daimler CEO Dieter Zetsche says that given no downturn in the world economy Mercedes-Benz cars should reach its target for return on sales of 10% by the second half of 2012. He predicted EBIT of 2.5-3 billion euros for 2010, and plans to boost expenditures for R&D in fuel efficient technology and capital investments in new vehicle models in the second half of 2010. Analyst Warburton at Sanford and Bernstein, writes that Mercedes is likely to pass 7% margins in the first half of 2010, and will get a boost from a weaker euro plus strong sales in China. The only question is, as Dieter Zetsche noted, prospects depend on no downturn in the global economy. China's economy is growing too fast to be sustainable growth and a property bubble is developing, and its not certain how long strong sales in China will last. There are other signs of a slowdown in the global economy. See global economy....

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China bans smoking in public places in June 2015. The authorites say unlike previous bans before the Olympics this one will be enforced. The damage to public health is immense, with about one third of smokers in the world in China. Public spaces include restaurants, offices, bars, nightclubs, airports and trains. Included also are areas around schools and hospitals. There are 301 million smokers in China, according to the World Health Organization. About 53% of men and 2.4% of women smoke regularly, and this contributes to 1 million deaths from heart disease, cancer and other diseases. WHO estimates about 100,000 deaths from second hand smoke. About 28.1% of the population are smokers, based on the 2010 survey. The survey was organized by the WHO and China's Center for Disease Prevention and Control. The figure of 2.4% shows women are less affected than men by the damage done to public health. Women also are leading the way to fight smoking and effects of second hand smoke. People in Beijing already have to deal with the effects of pollution in the air they breathe, and are keen on eliminating the additional harmful effects of secondhand smoke added to this....

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

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China is increasing export rebates aand investing in vocational training to keep the economy growing . Laid off workers are returning to their farms. THe real impact on growth and industrial production will come in 2009 according to Clement Chen, the chairman of the Federation of Hong Kong Industries. Because China has sustained a high growth rate for so long and the US has not yet felt the full impact of the recession it is possible to underestimate the impact on China's export dependent economy of a deep slump in exports as western markets shrink. The current 9% for the third quarter which does not reflect the credit crisis of October in global markets shows merely the early impact of slowing growth, with serious debt induced dowturn in the western economies China could see its growth drop to 6-7%.

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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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What this Editorial board opinion in the Indian Express is saying is that India should concentrate its efforts on modernizing its economy on a scale that is similar or surpasses that of China because of its access to the latest technologies. Just as China capitalized on the opportunity presented by its entry in the World Trade Organization in 2001, through an economy wide effort to build a manufacturing and export logistics base. India is presented with the opportunity of building its own manufacturing and export logistics base as supply chains are being redesigned in 2023. This requires a longer term plan with clear thinking and concentrated effort with the entire resources of the nation. What looks like a small or gradual shift in supply chain with the US and EU adding India and Vietnam to their Chinese manufacturing base is going to change with every change in world events, as the US concentration of manufacturing in China becomes a situation that is impossible to to maintain. The only logical way for the US and following the US the EU to create a proper balance in its political relationship with China is to change fully its lopsided concentration of manufacturing in China. Biden is only making the initial moves, the EU is only waking up to the need to make its own changes to reduce this concentration. How much distance does the US need to cover to reduce its concentration in China? By a large amount because the shift of manufacturing was excessive and ill advised done as companies in the US raced in a competition to shift outside over 2 decades and simply outdid themselves and performed a disservice to the workers and families of America whom they served. Just for the US to get workers and families to benefit from return of good manufacturing jobs to the US and restore its manufacturing base that has shriveled, it will have to be a massive enterprise, where day by day it becomes more evident that more and more needs to be and accomplished in an accelerated way. What this also means where appropriate to leave a progressively year after a year larger base in India, and also Vietnam, much larger than is envisaged today. This situation is even more acutely felt in Japan which to bring a proper balance in its political relationship with China needs to even more urgently reduce its concentration of manufacturing in China. It must be the task of the Modi government to have a clear view of the road ahead- build the needed logistical base for exports using the latest technologies and set higher and higher targets for manufacturing.  If you look at the map of Asia this is the Global South- India is 60-70% of the Global South with its population of 1.4 billion people mostly young with aspirations for a modern economy like that of the US and Germany. Add to that Indonesia and Vietnam, and other nations already in the redesigned supply chain in 2023 and you have 2 billion people in Asia. Concentrate on this for the next 2 decades for a complete transformation of India, that is what the younger generation demands of its government. ...

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A bill in the U.S. Senate in October 2011, which has bipartisan support, would push for China to correct an unfair trade advantage from keeping the value of the yuan low. The bill requires retaliatory tariffs for countries that have "misaligned" currency. This makes it possible for the U.S. Treasury Department to take action even if it finds no currency manipulation by China. This is a new approach as the U.S. Congress struggles to restore a level playing field in international trade.

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As Keith Bradsher of the NYT points out in this report too much may be made of the tariffs of 25% imposed by president Trump on steel imports. The effect Bradsher says on China is trivial because China imports make up a fraction of 1% or 0.1% of China's production, and only 2% of American steel imports. Most of China's aluminium is made into products such as auto parts and solar panel frames, and little of it is imported as raw metal. On the day the tariffs were announced, China's top economic official Liu He met with economic officials of the Trump administration and China's reaction was cautious and reflected the fact mentioned b.y Trump about its huge trade surplus with the U.S. of $375 billion in 2017. China's officials stated "that its dialogue with the U.S. was very useful, constructive, and helpful."  China's principal goals are first to preserve its broader trading relationship with the U.S. which gives it th $375 billion trade surplus for 2017 and creates millions of jobs in China, and to preserve its ability to invest in the U.S.  This has given China access to American technology and manufacturing expertise that would be difficult to develop independently. The Trump administration is meanwhile working with senior members of Congress to come up with new rules for tighter scrutiny of Chinese investments in the U.S. as a new phase of competition in technology takes place between China and the U.S.  ...

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Biden makes a change to US nuclear policy that covers coordination by Russia, North Korea and China.

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U.S. will no longer allow Chinese flights to the U.S. if U.S. airlines are not given permission for flights to China. Chinese airlines continued flights to the U.S. after U.S. airlines stopped flying in February and March. Air China, China Southern, Xiamen, and China Eastern operate reduced flights to the U.S. President Trump's order could bar flights starting June 16, or earlier.

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Regional rivals in each of China's 31 provinces make it difficult for foreign retailers, such as Tesco, Carrefour, Metro AG, Home Depot, to scale up and increase market share. Metro AG says it will pull out of China after testing electronics stores for 2 years. After years of losses Home Depot shut down its 7 large stores in China in 2012. Profit margins can be as low as 2%, making it unprofitable without the scale needed. Tesco's market share in China declined to 2.4% of China megastore sales in 2012 from 2.9% in 2008, and Carrefour sales declined to 6.9% from 8.6% in the same period, according to Euromonitor. Tesco now plans to partner with China Resources Holdings to merge its stores with the larger domestic Chinese chain's 4100 stores under 10 retail brands, with Tesco holding 20% of the joint venture. The CR Vanguard brand of China Resources 3000 stores would be merged wih Tesco's 131 stores.

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Strikers at a Honda transmission factory in Hoshan, 100 miles northwest of Hong Kong are asking for raises of $117 or 800 renminbi in cash above the $132 a month or 900 renminbi that they are now paid. About 950 of 1900 workers at the plant are trainees, young people from vocational schools or high schools earn $132 a month. Older employees earn upto 1500 renminbi or $220 a month. The significance of this strike is that the Chinese government is tacitly encouraging the strike as it begins making moves to increase domestic consumption and make the economy less dependent on exports. This requires consumer's having larger purchasing power and higher wages. It also means that China will not remain the low cost manufacturer for manufacture goods makers around the world for very long. Consider the size of the increase and the policy change of the government and this implies a significant shift by China.

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U.S. Trade Representative Robert Lighthizer was the negotiator who tackled Japan's huge trade surplus in the eighties under president Reagan. In 1985 he was the Deputy Trade Representative under Reagan. He negotiating a trade deal with China that includes U.S. tariffs on Chinese products. Here he tells the incoming Biden administration that the tariffs were a good idea in the American interest, and should remain in place till China reduces the huge trade surplus with the U.S. Lighthizer says "we want a China policy that thinks about the geopolitical competition between the United States and an adversary- an economic adversary." As this report says the cleavage with China has widened since then with the the virus that started in Wuhan, China, then spread to the U.S., killing more than 387,000 Americans and with 23 million people affected by the virus. Lighthizer has serious questions about the approach of the Biden team to seek consultations with allies in Europe and Asia. With his long experience  he is one of the very few who understand how things work. He says the U.S. started dialogues in the 90's. Nothing happened. "All of them were just a waste of time," says Lighthizer. Other countries could slow or veto U.S. actions. This is why the new incoming administration needs to show it has learned from history. In the trade negotiations with Japan the approach taken by Lighthizer worked. The U.S. can only not listen to his advice at its peril. ...