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Rockwell Collins CEO, Clay Jones, talks to the Journal's David Kesmodel, about Rockwell's strategy as the U.S. Defense Department faces large cutbacks. Rockwell supplies the cockpit electronics on military aircraft. With the growth in sales of Boeing's 787 Dreamliner and Airbus's jumbo jet, Jones is shifting resources, capital investments and engineers to the commercial aircraft business. He tells Kesmodel that his No.1 problem is to position Rockwell in the international area to benefit from sales to India, Saudi Arabia, Brazil, Turkey, South Korea, Australia, countries which he says will have to build their own aircraft capabilities as the U.S. pulls back from overseas bases. He sees international sales going up from 33% to 40%. Only small acquisitions are planned, of between $50-100 million, as Rockwell prefers organic growth.

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Experts in the U.S. say the U.S. made a mistake in not supporting the idea of a new financial institution to meet the urgent needs of development and infrastructure financing of Asia's developing countries. India, Australia, S. Korea, Britain, Germany, France and Italy are joining as founding members in 2015. China has offered leadership in providing resources for the new bank. Jane Perlez says China is looking for the best talent worldwide to help write the charter for the bank and to run it. It is a project pushed forward by China's president Jinping, and was discussed at the 2013 G-20 meeeting in Moscow as a critical part of the agenda. Laurence Brahm, who supported Chinese premier Zhu Rongji in 2001 for entry into the WTO, says it is natural for China to look for ways to use its extra capacity in steel, concrete and pipes to build projects in other parts of Asia, which would mutually benefit China and the region. Paul Haenle of the Carnegie-Tsinghua Center in Beijing, says the U.S. lack of support is shortsighted, as the existing U.S. sponsored institutions World Bank and the Asian Development Bank are sorely lacking the resources to deal with the huge infrastructure challenges in Asia. China's Finance Ministry is looking for the best talent worldwide to write the charter and run the bank. Natalie Lichtenstein, a lawyer with 30 years experience working at the World Bank will write the bank's founding charter. ...

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The US vaccination drive appears to be stalling when it comes to getting younger people vaccinated. On a recent day 1.13 million persons were vaccinated. About 150 million Americans are fully vaccinated or about 47% of the population. About 53% of the population have one dose. This still leaves the rest of the population close to one half unvaccinated as the US is opening up fully and removing the social distancing and mask mandates that existed before. The problem is that the coronavirus delta variant is about twice as transmissible than the original coronavirus of March 2020. Vaccination is uneven across the US. Large parts of the southern states and the western states lag behind. In these areas as well as areas with large urban concentrations of population, the densely populated cities where social distancing and mask mandates are being lifted as if the coronavirus crisis is over, are at risk of seeing a more powerful virus spread quickly before gene sequencing catches up with new variants- making the response lag behind in terms of weeks. That lag in response could lead to another wave in the US. Consider also that tourism is opening up in Europe with removal of mask mandates, that gene sequencing to track variants is tiny in even countries such as Italy and France. A WSJ report on June 22 shows gene sequencing to track variants at 1% of positive tests in Italy, and virologists in Italy saying they feel as if they are flying blind. This report in the Washington Post says surveys show as many as one third of Americans have no immediate plans to get vaccinated. This is showing up in the low numbers for the vaccination drive, of around 1 million a day at this time in June 2021. In April this was 3 million vaccine doses adminstered on a single day on average. India where the new delta variant has had the most serious impact has stepped up its response with the federal government taking complete responsibility for vaccine supplies and vaccination drives. It is now vaccinating aggressively in the range of 6 million to 8 million doses a day during the last 7 days with a plan to ensure enough vaccine supplies for 1.2 billion people to get vaccinated by December 31.  The European Union and the US have  vaccinated just over 50% of their population for a variant that is more than twice as transmissible than the original virus. This leaves the unvaccinated at real risk because all the social distancing and mask mandates that existed earlier are being removed- in the US, in France, in Italy, and other countries. Soccer stadiums are filling up in Europe, the kind of sports events that later hit Bergamo, Italy, in March 2020. Summer tourism is back in Portugal and Greece. The best intentions will not be enough. Are mask and social distancing protocols being lifted too quickly especially in tourist locations reminiscent of last summer in Europe and elsewhere. Germany and Britain are holding on to them a bit longer. Will this be enough to tackle a new variant. ...

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India's car market is expected to surpass Japan's by 2016, with estimated sales of 4.88 million vehicles in 2016. Sales were 2.91 million vehicles in 2011. Sales in China are expected to increase to 19.2 million vehicles in 2012, passing an estimated figure for Europe of 18.15 million for 2012. Sales estimates are by IHS Automotive.

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China faces three main challenges and how well it handles them will determine if China does well in the future because the things that helped China in the last 30 years of development are now gradually coming to a close. The three main challenges are a changing work force and the gradual phasing out of the demographic dividend thats responsible according to some experts for a third of the progress this far, the gap between the rich and the poor, and severely constrained resources and supplies of energy and environmental resources. On the first its not something China can do to much about, on the second its going to have to have a more balanced development and repair the network of social services and redirect resources to the poorer sections (see the link to the conference at Lindau, Germany and Nobel Prize Winning economists opinions on this issue). This will bring more discussion and challenges about how to proceed as a lot of actions to build new infrastructure and new construction has been done by taking over land where needed. And on the third challenge has not been done so well so far as the amount of energy required to each yuan of economic output has not changed much, seeing a 3.7% improvement over 2006 in 2007 and only a 2.9% improvement in the first half of 2008 over 2007. All this is why Secretary Paulson cautions that many American might be worrying about the wrong thing, China overtaking the USA, what really is the worry he says is whether serious troubles in China will affect the stability of the USA and global economies....

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Demand for biofuels, global warming on food supply in places like Australia, increased demand for food as living standards rise, population growth in Asia, affects food supplies and increase food prices.

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The cost of electric and hybrid cars, with the added factor of electricity shortages, make 'green cars' a rare sight on Indian roads. The Prius in India costs $40,000. Only 12,000 battery powered scooters and motorcycles were sold in 2010. With the right economics and convenience the situation could change. About 1 million compressed natural gas vehicles are on Indian roads, according to Asian NGV. This is because CNG vehicles are similiar in price to gasoline vehicles and the switch to CNG is inexpensive for regular vehicles.

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RIM's Blackberry phones struggle to compete with Apple's iPhone and phones using Google's Android software. RIM's second quarter net income fell by 59% to $329 million, from $797 million in the same quarter prior year. Gross margins declined to 39%, from 46% the prior year. Revenue declined 10% to $4.2 billion. The Playbook tablet computer is also struggling. RIM shares lost 19% of their value in after hours trading following the announcement on Sept 15, 2011. RIM introduced 7 new phones that are updates of existing phones. It is not known when the new phones using the QNX operating system will be available.

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Everything Everywhere, is a joint venture between T-Mobile and France Telecom. It is the market leader in Britain in mobile phone services since it was formed in 2010. Now Telefonica's O2 UK and Britain's Vodafone will form a 50-50 joint venture to combine their wireless grid so that they can reduce costs, invest in innovation and setup a new broadband LTE (Long Term Evolution technology) network. This will help both companies compete more effectively in the British market. It is not a merger as both companies will continue to run competing services. This type of arrangement is becoming popular in Europe because of the high costs of building one's own LTE network, and makes sense, say analysts, because quality is perceived by customers in terms of speed and reliability of service than simply coverage. O2 sees the potential of reducing cell tower masts by 10% with the new venture.

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The Bernanke Fed's decision on Sept. 16, 2013 to continue the pace of bond purchases is seen with relief in emerging markets and taken positively by equity markets worldwide. The Fed's decision is based on evidence of sluggishness in the economy and in the pace of job growth, as well as the likelihood of more political uncertainty about the budget because of sharp differences between Democrats and Republicans.

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Denning uses the Brazilian government's scrapping of a 6% tax on foreign purchases of bonds to slow the slide in the value of the Brazilian currency, the Real, to point to the changed situation today for Brazil, India, Turkey and S. Africa. Current account deficits in these countries are high, and foreign investors sentiment about emerging markets may be affected by the street protests in Turkey, reducing inflows of capital. The mining worker protests in S. Africa and the street protests in Turkey, have led to a decline in the currencies of the two countries. The Fed's quantitative easing program may be coming to a close, which would reduce the flows of capital to emerging market countries. Turkey has seen a boom in domestic credit supported partly by foreign capital inflows. The current account deficit to GDP ratio for Turkey is expected to be 7.28% in 2013, for S. Africa 6.46%, and Brazil 3.25%, according to IMF forecast.

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In a major policy move India's Modi government makes major changes for foreign investment in India. In different sectors, pharmaceuticals, defense, civil aviation, and retail stores, the move is designed to attract investment and create new jobs. Foreign investors can now take 100 percent ownership in defense, civil aviation, and food products sectors with government approval. In pharmaceuticals foreign investors can take upto 74 percent ownership with no government approval needed. In retail stores, such as for Apple and Ikea, the rules offer new incentives. From now on the requirement that Apple and other companies buy 30% of their supplies locally for single brand retail stores will be relaxed with a 3 year exemption on local sourcing, which can be extended to 5 years if the products sold are "state of the art" and "cutting edge technology," according to a government announcement. The changes were made by executive order. Apple CEO Tim Cook visited India and lobbied for this change recently. In combination with a national GST goods and services tax to be passed in July 2016, which is to be instituted nationally to replace a old set of state by state requirements and taxes, the two changes could have a bigger impact than the 1991 reforms that moved India away from a socialist managed economy. Poor job report numbers may have increased the pressure for taking action. In the defense sector the earlier change to allow 49% ownership had resulted in few new proposals. The changes in foreign investment rules also follows the resignation of the head of the central bank, Raghuram Rajan. ...

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Venezuelan president Chavez says his cancer has returned and he will need more surgery in Cuba. This comes shortly after winning the presidential election. He asks Venzuelans to support vice president Nicholas Maduro, a former bus driver and union leader, for president if new elections are held. Venezuela's constitution requires new elections in 1 month if Chavez dies or resigns. Higher spending in the election year has widened the gap between revenues and spending from 5% to 20%, with expectations Venezuela's currency, the Bolivar, will be devalued.

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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Changes to China's five year plan to include critical social goals, reduce income inequality, and provide a social safety net. The influence of local governments in distorting central government policy.

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The slowing of China's growth with GDP growth for 2012 estimated by the government at 7.5%. Growth was 8.1% in the first quarter of 2012, with expected decline in the second quarter. In response China's National Development and Reform Commission, which executes economic policy in China, has accelerated the approval of major infrastructure investments starting in April. This includes hydropower stations, clean energy projects, 4 new airports and renovations of 3 large steel plants, a subway in Nanjing. The investments total about $150 billion. Another stimulus comes from investments by local governments with central government support, including highways, sewage treatment plants, and $55 billion investment by state corporations in the Chongqing municipality. To revive the auto industry a cash-for-clunkers program is also planned, and this may include cash incentives for home appliance purchases. In addition to this the State Council headed by premier Wen Biao is making plans for 20 major projects in 7 strategic industries, from advanced equipment manufacturing to energy conservation. The result is a Stimulus that will be much smaller than the $585 Stimulus spending of 2008-2009, with a measured response compared to the earlier splurge in spending. Experts say the Communist party sees this as ensuring a smoother transition to a new president and prime minister in 2012, with added credibility for the nations growth and for the leadership of the Communist party in the modernization drive. ...

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Duke Energy's CEO, Jim Rogers, talks to Charlie Rose about the U.S. nuclear industry and the future for nuclear energy in the aftermath of the nuclear disaster in Japan.

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The IMF's Anoop Singh, director of the Asia-Pacific department, says the inflation in Asia and other countries is a result of wider structural economic shifts, not just a one-off result of the weather related food production declines. For this reason the response should be broader reforms to control inflation. Monetary policies alone cannot therefore do the job, more strengthening of currencies will be needed. Singh says some of the underlying demand in Asia is a result of a widening middle class, which implies the price pressures may not be temporary. The high growth rate in Asia has some good and bad aspects. The bad aspect is the quality of some of the growth and the sustainability of that kind of growth, says Singh.

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This editorial in the New York Times points out that the new president of the ANC party -that runs South Africa and has a monopoly of power in the post Apartheid years, under Mandela, Mbeki and Zuma- faces a uphill task as the ANC remains deeply divided after supporting Mr. Zuma in office till the very end. Apart from the stagnant economy, there are challenges the ANC faces in the lethargy of the post Apartheid years, and the culture of corruption, and patronage management that led to mismanagement of state enterprises.