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Rattner looks with alarm at recent figures showing that of 2.65 million jobs created in the U.S. in 2015, only 30,000 were in manufacturing. He reflects on growth in manufacturing with the recovery in automobile manufacturing between 2009- 2013 - during this period employment in the U.S. auto industry went up by 23 percent to 690,000, and employment in Mexico's auto industry went up by 60 percent to 589,000, showing much faster growth overseas. Manufacturing has also experienced decline in private sector wages of 0.8% since 2009, with auto industry wages down 12.7 percent, says Rattner.

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A shift in priorities away from focussing on high growth to lower sustainable growth was announced by China's premier Wen Jiabao at the National People's Congress, China's parliament, in March 2012. This shift will reduce investment in infrastructure, power generation and exports, which will affect the level of imports of commodities from commodity producing nations in the Middle East, Australia, Canada and Brazil. It should increase imports of software, computers, entertainment, tourism and high tech goods from the U.S. and Europe. Chinese leaders have said they would make this kind of shift for some years now but growth has consistently increased more than the target rate, and domestic consumption as a percentage of the economy has actually decreased in the last decade. Now 9-10% growth rates may be a thing of the past and the target of 7.5% set this year may be actually closer to the real figure. The Chinese leaders have belatedly realized the need to make these changes now because slowing markets in Europe -which is seeing declining growth and high unemployment- and in the U.S., make the issue impossible to avoid. Wen told the Congress: "Accelerating the transformation of the pattern of economc development... is both a long term task and our most pressing task at present... Domestically it has become more urgent but also more difficult... to alleviate the problem of unbalanced, uncoordinated and unsustainable development." This is his way of saying that its unavoidable and better to start in earnest now, and at the same time recognizing the resistance to change from the stateowned companies and the other interests who have benefitted from surging growth, and now occupy a central role in the power structure. An opinion article in the People's Daily, China's official newspaper, said: "imperfect reforms are to be preferred to a crisis caused by no reforms." The World Bank's president Zoellick is respected by the Chinese leaders. He also urged them to make changes now. The recent report of the DRC, China's planning research arm, and the World Bank, also laid out the new direction away from a focus on infrastructure to domestic consumption. The fear is sudden deceleration in the absence of policy action. The impact of this will be negative for commodities over time, leading to slower growth in Australia, Brazil, and Canada. It should boost imports from Europe and the U.S. of high tech, consumer, pharmaceutical goods over time....

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Hillary Clinton narrowly loses the Michigan primary to Bernie Sanders in March 2016, as the Sanders campaign focusses on Clinton's support for trade agreements that hurt American workers and lead to loss of manufacturing jobs. About three fifths of voters in the Michigan primary considered this a major issue. Many less educated younger workers see their job prospects diminish and wages drop with free trade that hurts American manufacturing jobs. Bill Clinton signed the NAFTA agreement with Mexico, and as a member of the Obama administration Clinton supported the Trans Pacific Trade Agreement, later opposing TPP when she left the cabinet. Sentiment against trade that hurts manufacturing jobs in the U.S. is strongest in midwestern states such as Michigan, Ohio and Illinois. This was also a major issue benefitting the Liberals under Justin Trudeau who won in Canada's industrial Ontario province which has suffered hollowing out and loss of manufacturing jobs under the Conservative Harper administration. In the U.S. the issue goes back to the Clinton Administration for two decades. New jobs created by Apple, Google, and other tech companies pale in comparison with the industrial jobs created in another era that benefitted working class families. This issue and high unemployment or under employment, lower wages for working class families, was a major issue in the 2016 U.S. presidential election campaign. Widening wealth disparities, and lack of upward mobility, high tution and healthcare costs for ordinary families, dominated the campaign in the U.S....

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Since 2004 consumer spending's share of the economy in China has fallen from 40% to 35%.

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Toyota reported a 77% drop in earnings in the first quarter of 2011, with a large loss in the Japanese operations. The strong yen trading at 81 yen to the dollar is a significant factor. And for the first time Toyota's CFO Satoshi Ozawa said "we have reached the limits of profitable Japan based production at 80 yen to the dollar." Japanese operatios lost $2.4 billion. Honda reported a 38% drop in earnings for the 1st quarter.

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A waning boom and lower growth rates in Brazil, and improving economic prospects for Mexico- diverging emerging markets and policy mix in 2013.

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The U.S. Senate voted 79-19 to go forward with a bill on sanctions against China for undervaluation of the yuan. The IMF says China's currency is "substantially undervalued."

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Sharply lower consumer spending is hurting Apple sales in China. Apple cut sales and issued a sales warning in January 2019. This follows Apple's sharp slowdown in India with its uncompetitive pricing.

Retail sales growth in China- which bounced back in previous downturns- dropped to the lowest level in 15 years in November 2018. Auto sales are down with the sharpest drop in 7 years- the first annual drop in sales since 1990. Fears of a housing bubble have led to restrictions on home purchases for speculation which have not been lifted. Income tax reduction has not increased spending. GDP growth for the fourth quarter dropped to 6.4%.

Further signs of a sharp pullback are seen in the drop in consumption tax revenue falling by 61% in October and 71% in November 2018. The consumption tax is placed on cars, gasoline and luxury goods, and is paid by the companies making the products.

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U.S. exports reached $2.34 trillion in 2014, increasing by $760 billion over the figure in 2009, according to the Commerce Department. Exports accounted for one third of the U.S. economic growth since 2009, say Pritzker and McNerney. Goods and services for exports supported 11.7 million U.S. jobs in 2014, and a Commerce Department 2010 paper shows these jobs pay 18% higher than jobs unrelated to exports. Commerce Department Secretary Pritzker, and McNerney, chairman of the President's Export Council, say free trade agreements and investment by private business is critical to supporting export promotion, but make no mention of the effect of the stronger dollar on future exports. In a period of a few months in 2015 the euro is approaching parity with the dollar and the yen is now 120 to the dollar, giving European and Japanese business a significant advantage, and raising questions about the strength of the U.S. recovery going forward.

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Mitt Romney states the case for supporting free trade both in principles and practice. Acceptance of the staus quo allows China to game the world trading system, says Romney. In the end accepting the status quo may do more damage to the world's trading system than any efforts to correct the misalignment in currencies and failure to rebalance the world economy. He questions the passive approach of some members of Congress and the Obama administration on the grounds that starting a trade war makes them nervous. China with $273 billion more in exports than imports to the U.S. has reason to see this issue objectively, even with all the noise it is making about trade retaliation, suggests Romney. Other experts have pointed to the problems the misalignment creates for China's economy. A New York Times editorial on October 15, 2011, cites figures from the Peterson Institute of Economics showing this costs China $240 billion a year through trade surpluses in dollars that are declining in value. For years China's fears are that this would lead to higher unemployment. This New York Times editorial points out that jobs have increased by about 1% a year since 2004, even with 10%+growth, because many of the manufacturing jobs use advanced manufacturing technologies. A firm response today also makes it possible to avoid the kind of sudden response that could take place later on if public opinion overwhelmingly shifts away from trade with China under status quo conditions. ...

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U.S. Secretary of State Hillary Clinton, says Russia's entry into the World Trade Organization in the summer of 2012 will be good for the global economy and for the U.S. It will increase U.S. exports to Russia from the low level of 1% of U.S. global exports. It will also set the right tone for improving U.S.-Russia relations and improving cooperation on global issues. She calls for Congress to change the Jackson-Vanik amendment and setting up normal trading relations between the U.S. and Russia. It is a smart investment in trade with Russia,and also a way to help Russia diversify its economy, setup an open political system and put its world trading relationships on a more transparent basis with clear tariff rates.

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Miroff describes the situation for Mexico's middle class in the face of rising crime, a deep distrust of the police that extends to neighbors. This is seen through the lives of a middle class family, Alfredo and Lilia Hoyos, in the town of Cuernavaca, 50 miles south of Mexico City. Long known for its quiet neighborhoods, a second home to many civil servants in Mexico City, a university town famous for its language schools, Cuernavaca is now caught up in the struggle with drug gangs and rising crime. The Mexican government sent marines in helicopters to kill drug gang leader Beltran Levya. The level of trust in the police with rising crime is low making the situation worse. In a recent poll, only 6% of respondents said they could trust the police, 40% said "little" or "none." An OECD survey in 2008 showed Mexico at the bottom of the list of 34 countries for citizens expressing trust in their neighbors and community. The drug war has taken a serious toll on trust in the community since then. Hoyas had a difficult time setting up a neighborhood watch for security because people feared to participate. As Mexico modernizes and the middle class expands the situation on this basic parameter of development deteriorates....

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A study by Prof. Peter Petri of Brandeis University, shows the Trans Pacific Trade Agreement boosting economic output in the U.S. by about 0.4% by 2025 or $77 billion. Winners are biologic drugs which get long term patent protection, tech firms and software engineering services. Losers are the Detroit auto industry with higher auto parts imports, light manufacturing, and some heavy manufacturing sectors. Prof. Douglas Irwin of Dartmouth College and other experts say it is not clear how U.S. consumers and businesses will benefit. The import duties as a percentage of total imports are now at about 1.4%. Experts say about 4/5ths of the benefits of TPP for the U.S. are from opening up trade in services and new rules for investment and commerce. TPP includes Pacific countries Canada, Australia, New Zealand, Chile, Mexico, Malaysia, Singapore, Vietnam, and Japan. Issues are environmental rules, worker protection and standards, agricultural imports in sensitive countries such as Canada and Japan, affordable drugs in poor countries....

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This New York Times editorial after the Senate passed a bill in October 2011 calling for action on the misaligned Chinese currency, points to ways a misaligned currrency is damaging for China. It cites the Peterson Institute for International Economics estimate that this is costing China $240 billion a year. This is a result of accumulating huge dollar reserves that have a declining value against the renminbi. Higher import prices lead to higher inflation. And low interest rates on savings, to the point that they are lower than the inflation rate, hurt the vast majority of Chinese and reduce domestic consumption. And perversely this leads to money pouring into speculative uses such as real estate, creating unsustainable bubbles in housing. The Times editorial says China is not generating jobs from this strategy, as the export strategy is relying on use of advanced technology in manufacturing and not creating many jobs. It cites a statistic showing employment has increased by only 1 percent a year from 2004 even with GDP growth above 10%. China is beginning to realize the cost of this strategy, and is planning a shift in its five year economic plan. But this rebalancing has many obstacles. The current system dominated by state run companies, banks, local and federal government, is biassed in favor of the old export led strategy, and experts are pessimistic about the possibilities for change. The Times suggests China may be falling back on the export led strategy as the global economy is slowing. The whole system would have to change after three decades of this kind of development, and would require new leadership and major changes....

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Krugman points to the need for action on revaluation of the yuan, and sees the vote in the House of Representatives sponsored by Sander Levin as a necessary step to get China to act. He sees China as dragging its feet on this issue for many years, and the need to keep the heat on US policy makers, who have acted very passively on this issue. He describes the US policymakers as being infuriatingly, incredibly passive in the light of the Chinese inaction and stalling on currency appreciation. China he says denies manipulating the exchange rate, even as $2.4 trillion foreign currency was purchased by China. Krugman says China is not letting what is a natural process to unfold that would help the world economy as a whole to recover. Its manipulation of the exchange rate, is in effect subsidizing its exports at the expense of other countries like the US. See the link to Roubini, who shows how this is bad for China. Roubini says China will see a growth collapse in 2-3 years, if it does not change direction and let the yuan appreciate. He says it is in effect a large transfer of income from Chinese households to Chinese state owned companies which is dangerous because of increasing misallocation of resources and real estate speculation. See David Barboza for information on the real estate speculation of these Chinese state owned companies. When all this information is added up, it shows China's serious need to act. This would make possible a transition to a new model of development that relies on domestic consumption, and bettter allocation of resources and investment. ...

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The yuan is up 5.5% since the peg to the dollar ended in 2010, reaching 6.469 to the dollar. But this is not helping the U.S. trade deficit. The U.S. Bureau of Labor Statistics shows the price of imports from China are up 2.8% in May over the same month prior year. And the trade surplus for China in the first four months of 2011 is higher than the same period in 2010. What is happening? The improvements in productivity of Chinese manufacturers and the acceptance of lower margins is reducing the effects on trade balance of a small appreciation of the yuan, so that only a fraction of that appreciation is showing up in higher prices for Chinese goods. Also significant is that the yuan's small appreciation against the dollar is not enough to make up for the dollar's fall against other currencies. The yuan is down 8.3% against the euro and has actually declined 3.7% on a trade weighted basis in the last year.

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The Indonesian currency, the Rupiah, has declined by 13% in 2013- by Sept. 3. It reached a level of 11,050 rupiah for one dollar on Sept 3. Economic growth has declined to 6% for the second quarter of 2013. The depreciation of the rupiah is likely to increase inflation significantly and affect the consumer spending boom in Indonesia. Indonesia had a $2.3 billion trade deficit in July 2013 after a continuing surge in imports. This will affect car prices and prices of international brands popular in the country. Toyota set the rate at 9500 rupiah to the dollar and plans to increase prices now that the rate has passed 11,000 rupiah.