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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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Now that finance ministries around the world are trying to save their economies with trillions of dollars in aid packages their finances are stretched to the limit. The so called digital tax is not really a digital tax. And efforts to recover lost tax revenues in Europe are being opposed by the U.S. because tax levies by France go only to France, not the U.S. The U.S. Treasury or U.S. government or the American people would not turn down tax revenues that it normally gets when its finances are stretched to the limit with trillions of dollars for cornavirus leaving little for crumbling infrastructure and essential public health services, other services that determine quality of life in America.  This Washington Post report shows that there is greater awareness that the right approach is to pay taxes based on where revenues are located and by the number of users in each country. But the problem goes deeper than that. The coronavirus changes the entire perspective and take this back to roots. Companies pay taxes because it is the right thing to do. In Japan Panasonic's founder Matsushita felt that it was a national duty to pay its share of taxes as it too was sharing in the benefits provided by society- in the health, sanitation, education and transportation, parks, and hundreds of services provided by government. Once this is seen as dispensable or somebody else's problem, then these very services and infrastructure can be starved of capital. Coronavirus changes this perspective. People crave for outdoor spaces- who is going to maintain them and set up new spaces. People crave for not moving around on crumbling bridges, roads, subway systems. Who is going to provide them? People crave for good schools, community colleges. Who is going to provide them? People crave for good sanitation systems? Who is going to provide them? People crave for good public health systems. Who is going to provide them? Its just good common sense. Is it possible for common sense to be missing? It is- just ask people today, and it is good common sense to have good critical infrastructure such as sanitation, medicine, public health, and local manufacturing of medicine, yet economic experts and economic theories thought it made sense not to do this.  ...

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The stimulus checks in government pandemic aid packages are being spent prudently in the US. Government aid checks were sent out in the first wave since March 2020 and now again in the second wave in 2021. The stimulus pandemic checks are being allocated wisely. A Federal Reserve Bank of New York study shows that Americans saved about 36% of the first stimulus payment checks, 29% was spent, and 35% was used to pay down debt. For the second stimulus payment underway in 2021 this survey also shows Americans are expected to spend even less and use even more to pay down debts. With stores mostly closed, travel restricted, and consumers not having the opportunities to spend, and the sense of insecurity, additional income from unemployment checks, saving has increased. Americans saved $1.4 trillion in the first 9 months of 2020 compared to half that in the same period in 2019, according to analysis by Berenberg Economics. That amount is about 10% of household spending. The tight spending during 2020 means, say economic researchers, that spending will jump in 2021 after the vaccination drive. The trend is positive in that Americans tended not to save enough. People in China and India, tend to save more giving government a larger pool of savings to draw from in national infrastructure spending. In November 2020 Commerce Department estimate is that saving in the U.S. was 12.9%, up from 7.5% in November 2019. Anecdotal evidence shows U.S. savings accounts for people at the lower end of incomes have been depleted for years, hit by the unemployment of the 2009 recession. This was caused by errors by the banking community and business. To this is added people in arts and culture, people in professions involving contact, travel and leisure, food, during this pandemic ten years later. National priorities need to be set to bolster this part of American society and its core social fabric. The steps to bring home manufacturing jobs under Mr. Trump and the "Buy American" initiative under Mr. Biden is just the first step. More steps are needed and the resources, implementation and drive to bring America back to the healthy society of social cohesion and upward mobility aspirations under presidents Truman and Eisenhower in the 1950's. ...

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Delocalisation for Airbus as most of its production is in the euro area and its sales are in dollars. This policy is gradually taking hold to outsource manufacturing without making some of the errors that Boeing made with the Dreamliner.

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Samsung to build a $670 million plant in northern Vietnam to build mobile handsets. Samsung officials cite lower costs as a key attraction. This shows the trend for manufacturing to shift to lower cost regions as wages rise in China.

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Obama's comments during a visit to Greece about the challenges facing multiracial and multicultural societies such as the U.S. and the people left behind through globalization. He says "we are going to have to guard against a rise in a crude sort of nationalism or ethnic identity or tribalism that is built around an "us" and a "them."  Obama also referred to a global elite "that seems to live by a different set of rules, such as being able to avoid taxes," which he said "fuels a feeling that globalization only benefits those at the top," and leads to a push back from people who feel they are losing control over their future." The problem for workers is that fewer and fewer workers are needed in todays advanced automated factories and manufacturing moves across borders leading to anxiety. The president may have realized the extent of the damage only in the closing days of the campaign in 2016, because of his support for trade agreements without talking in this manner about the lives of workers.  ...

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Over the short run Europe presents some opportunities after Germany's Merz gets the constitutional brake on spending removed and plans $1 trillion in spending on infrastructure and defense. The US is busy with immigration and other challenges, and tariffs are part of the effort to stop fentanyl on Canada, Mexico and China. This poses uncertainty for business in 2025 which should gain clarity as most tariffs are meant to ensure a level playing field and India, China, EU, Mexico, Canada cannot argue with the idea of we charge them what they charge us, as reciprocal tariffs, as fairness in trade. These countries have reason to cooperate as it is basically fair trade DJT administration is after. Japan cooperated so history shows it can be done and Lighthizer was Deputy Trade Representative under Reagan when he got the Japanese to cooperate and be fair. His deputy is Jameson, now US Trade Representative in 2025. They are no ideologues, just fed up with the way things are and US carrying the trade imbalances and shipping manufacturing overseas that hurts ordinary Americans. US exceptionalism is seen as prevailing after a period in which American companies gain a footing in a level playing field and unfair advantages China, EU other nations had are corrected for investors in the UK, Australia, India and many European countries. It also gives American companies a chance to retool for a new business environment that can offer more opportunities and markets including in India and Europe. ...

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The U.S. Senate votes 92-2 in near unanimity to pass a bill on opioid addiction, for prevention, treatment and recovery. This comes as the U.S. faces a opioid addiction crisis in 2016. It increases funding by 47% for the efforts, with funding approval to be voted on separately.

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As the USA and Europe move into a deep and prolonged recession China loses some of its biggest export markets and faces a significant slowing down of its economy. China's leaders are pondering how to respond to the crisis which will affect China, and meet the challenges of lower living standards of a neglected rural countryside and farmers compared to the urban coastal areas. This is still where some 800 million of the Chinese people live by official count, so something needs to be done to improve prospects and help generate higher incomes and opportunities for people in the farming countryside. Making land use rights of farmers able to be bought or sold for the first time would generate additional income for farmers, and help consolidate farmland into larger plots, which can use technology and improvements for better yields to keep China self sufficient in agricultural production. Keeping the situation the way it has remained for the last two decades, where local party officials and local leaders controlled the land and where farmers rights were ignored leading to suppression of farmer's protests for illegal land seizures and corruption, may have made it easier for plants to be setup across China and attracted foreign investors. But it has not been good for China's farmers. Chinese party officials at the local level who realized the advantages to them by controlling land and making it easier to set up manufacturing plants with foreign investors may have steered state policy in this direction from the early days after Deng's opening to capitalism and trade. Now with a success in the urban coastal areas and in building infrastructure Chinese leaders in the central government must be faced with a difficult issue of how to move on from here with the loss of China's export markets for its heavily export dependent economy. The need to generate a domestic consumer driven economy must not be lost on the Chinese leadership in Beijing. Something that will keep China's economy moving in the new situation. This is the context in which land use rights may be extended from 30 to 70 years and able to be bought and sold to improve farm incomes and generate internal momentum in the rural areas where most of China's people live. It also offers a contrast to the situation India faces where even the Nano plant of Tata Motors had to be moved from W. Bengal state to Gujarat state over farmers rights to land which in that case was also used as an issue for political agitation. The move by China accelerated industrialization and setting up manufacturing plants as land was taken over by local officials for use with foreign investors but also ended up neglecting the countryside, and created too big a dependence on exports....

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China's slowdown may be much worse than is generally thought. Germany went through this thinking that it was relatively safe as it had no housing bubble and no consumer debt like the US and the UK. But the drop in demand from China and other countries has led already to a contraction in the German economy by 0.5% in the third quarter of 2008, expected to worsen to 0.8% in 2009. China's National Statistics Bureau announced a 4% decline in electricity output inOctober from a year earlier. This is a result partly of factories manufacturing for export cutting back as their orders decline. There was a 17 drop in production of pig iron and crude steel in October and a 0.7% fall in output in the output sector. From all this it appears that even without the beggar thy neigbor policies of the 1930's, even without the protectionism of that period and even with the global coordination of the G20 and the G7 countries, its hard not to see the impact in one place flowing through to other places. The loss of export markets in the USA for Chinese export factories leads to this slowdown in China which in turn now needs much fewer machinery imports from Germany leading to a contraction in Germany. See the link to German economy in WSJ November 14, 2008. These effects show up in an exaggerated manner with economic contraction because of the heavy dependence on exports in Germany to China, and heavy dependence on exports in China to the USA, and the heavy consumption of Chinese exports in the USA, all ocurring in an exaggerated unsustainable way considering the American spending binge and the zero savings rate in the USA, the pressures on the environment with runaway growth in China, and the lack of any domestic led consumption in Germany. China's infrastructure spending can provide some growth along with the stimulus spending but much of the export led growth may disappear. The stimulus spending could help prevent a contraction in the Chinese economy but may deliver only a few points of growth, way off from the runaway over 10% growth of two decades which was heavily dependent on manufacturing exports. How badly Chinese exports are affected depends on how badly the US market is affected for Chinese imports. Higher unemployment in the US if the auto industry sees a collapse in its market in 2009, would lead to lower consumption in the US as laid off workers cut their purchases at Walmarts and Targets and at other retailers, and this would drive imports from China to even lower levels, wiping off a couple of percentage points of China's GDP growth rate. ...

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Boeing's improvements in quality and production processes for the Dreamliner, as the first Dreamliner which will not need major additional work before delivery comes off the production line. Costs of production have reached the point to where Boeing is losing $100 million on each plane sold. Ony 300 small assembly tasks remained, closer to the 200 that is the company's goal, and improvement over the 6000 additional small assembly tasks remaining in the early versions. The Everett, Washington plant now can make a 787 Dreamliner plane every 6-7 days. It costs Boeing $242 million to make each plane, and it sells them for $113 million according to UBS analysts. Boeing will have invested about $20 billion in the Dreamliner by 2014, when analysts say it should turn a profit.

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Hard hitting article by an expert in the field of manufacturing and the automobile industry. Problems facing GM and Ford in his view- Note the following: 1) The engineering system with chief engineer in charge of product, concurrent and simultaneous engineering. Better development system for new products at Toyota. 2) How to work with suppliers by leaving room for suppliers to make a profit while attacking every kind of waste jointly. 3) Hardest hitting point on the culture. GM and Ford have cultures that turn competent people into Dilberts. And noting that if ordinary people -Dilberts even- are put in a great business process they become great team players. 4) Customer Service at Lexus. Customers cheerfully pay more because they love the treatment. 5) Labor relations- Union and management know what does not make sense yet no accomodation has been reached, because their conversation has broken down. Womack's comments leave a lot to think about and reflects a feeling that seems to run outside of the midwest- that if GM and Ford can't get a grip on their problems and fix them other companies like Toyota can replace them. A sense that Toyota as a global company is as much of an American company as GM or Ford. ...

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The countries that would be affected the most from a slowdown in China are the commodity producer countries- Australia, Brazil, S. Africa, Chile. Other countries include Thailand, Indonesia and Vietnam. Currencies such as the Australian dollar, the South African Rand, the Brazilian Real and the Chilean peso would decline in value. South Korea, Taiwan and Japan which supply large machinery for construction and manufacturing would be affected. Oversupply of steel and other products in China would mean higher exports causing a drop in steel prices and prices of other items. There would be a decline in commodity prices. Germany which provides the high tech machinery for China's industrialization will be affected. Exports growth to China from Germany increased by 44% in 2010. It has been pointed out that China is the seventh largest export market for Germany, coming after France, the U.S., the Netherlands, the U.K., Italy and Austria, exports to EU countries being the largest market for Germany. A global economic slowdown, with the Chinese slowdown as a part of this would impact German exports, leading to a slower growth in Germany. The U.S. would be affected also because exports were picking up in 2010-2011, and remain the one bright spot for the U.S. economy's recovery....

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Turkey's trade deficit increased to $10.2 billion in June 2011, according to the Turkish Statistical Institute. This is almost twice the trade deficit only one year ago in June 2010 when it was $5.7 billon. Imports went up 42%, and exports showed annual increase of 19%. Warnings of a "hard landing" were made by Standard & Poor's. Turkey's economy is on a unsustainable path with the economy growing 11% in the first quarter. The IMF forecast is for the economy to grow at 4.6% in 2011, compared to 8.9% in 2010, which suggests a sharp slowing down of growth for the remainder of the year. Concern is also rising because Turkey has fallen behind in competitiveness. The manufacturing sector depends on large inputs of imported raw materials and semifinished products. A breakdown of the trade figures show 71% of the $10.2 billon deficit was from intermediary goods including raw materials, and 28% from capital and consumption goods. Efforts to reduce the current account deficit were expected by analysts after the recent presidential elections, but this has not happened. It appears that the Turkish government is taking a wait and see attitude for possible sluggish growth worldwide and not taking actions of its own that are necessary....

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Anand and Fairclough describe the aspirations of millions of young Indians stifled by the last few years of inept governance under the Congress party in India. Economic growth dropped to about 5% as the government did little to increase investment and growth, leaving India further behind nations such as China, Japan and S. Korea. The speed with which foreign investment in plants in Gujarat by the Tata Group, Bombardier and smaller companies such as Germany's Duravit took place, contrasts sharply with the red tape under the federal government of the Congress party and prime minister Manmohan Singh. Duravit's head of its Indian unit says the process was corruption free, fast, and had to be seen to be believed. Tata Group's head Ratan Tata, was a strong supporter of Modi after the Tata Group built its plant for manufacturing the Nano small car in Gujarat. The decisive mandate from the election, including the decisive vote from young people, the strong support of the business community in India determined to move ahead after 3 years of stalled governance, and the low starting point in areas such as electricity development and regions of the country lacking essential infrastructure, gives Modi a unique opportunity to put India on the path of good governance and rapid economic development....

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To get an idea of the scale of paralysis in the Congress party administration of Manmohan Singh in India in 2011-2014 consider this- more than $100 billion in critical infrastructure projects were held up by slow growth and red tape, according to estimates of the Centre for Monitoring the Indian Economy. The Congress party was too preoccupied with fighting charges of corruption adding to the lack of leadership from Singh and Gandhi, and focussed on programs of subsidies for voters to prepare for the 2014 elections. In the last 12 months alone ending in March 2014, manufacturing projects of about $54 billion were shelved, according to the Centre for Monitoring the Indian Economy. The climate of uncertainty led to Indian companies investing overseas, or simply holding back instead of investing in the Indian economy. Industrial production declined for the first time since the 1990's during the 12 months ending in March 2014. It is in this vaccum in leadership since 2012, and a seriously troubled economy, that the 2014 parliamentary elections were held. Impatient young voters- with about 100 million new young voters added to voting lists- gave Modi and the BJP party an absolute majority and mandate for coming up with new solutions to India's problems in jobs and infrastructure....

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Jonathan Ive, Apple's design chief, talks about what it is like working as part of a very small team that included Steve Jobs and Tim Cook for two decades. Jobs complete focus was on creating great products. The innovative products were created through the work of very small teams, says Ive. Two attributes the team members had to have are being inquisitive and curious. Making the product, manufacturing it using new technologies for materials like light weight titanium, was not something tacked on at the end, but something that was addressed as part of the design at the outset. Form, material, process- the design development and making- are intertwined thorughout, says Ive. For titanium that meant complete redesign, discovering new partners to work with, and hiring a new organization. This put Tim right at the heart of things and deeply involved right from the beginning. Ive repeats the idea focussed small team effort, and says this is no platitude. Titles, organizational structures are insignificant in this setup. Today Ive meets 3 times a week with Tim Cook. Tim sees design as an effort to articulate how a user sees the object, and credits Cook with a unique ability for giving this special attention and working to understand how an object is perceived....

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China's leaders meeting at the Third Plemum in November 2013 announced changes to the one-child policy. If either member of a couple is an only child the couple will be allowed to have 2 children. The result will be that most Chinese couples will be able to have 2 children. Demographic experts say this is unlikely to lead to a large increase in China's 1.3 billion population as a majority of only child parents live in cities where the cost of raising children is very high, and many parents will avoid the cost of a second child. In the past couples with both partners as only children, which is common in China's urban areas, have been permitted to have a second child but have not chosen this option because of the costs of housing and education. Rural families were allowed to have 2 children if the first child was a girl in the past. With the decline of the number of people of working age, and an increase in older retired people, this is also a way to address the problem of shortages in young people to work in manufacturing and assembly lines. This is needed to support an increasing elderly population....