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Peter Morici is interviewed by Maria Bartiromo. He says the dollar should be devalued against the yuan by 40-50%. China by keeping the yuan undervalued has provided its exports with the equivalent of an export subsidy. China will only allow imports of solar panels with 75% domestic content, the US does not. The other problem is the banks and compensation. Morici says banks compensation should be like that of a regulated public utility. Can one imagine the head of Con Ed making the kind of compensation at the banks?

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China's dollar for dollar retaliation on $16 billion of U.S. imports with 25% tariffs set to take effect August 23 excludes oil which was on the original list. China takes in about one fifth of the total U.S. oil exports, and in the space of 2 years has become the largest importer of U.S. oil. Experts say China could be shooting itself in the foot if it decides to place tariffs on oil imports from U.S. China is dependent on foreign sources for 70% of energy needs and this trend continues. Another reason say analysts is that by keeping oil out of this trade dispute there is more chance that China can continue importing Iranian oil through a waiver  after U.S. sanctions on Iran go into effect in November.

The U.S. also exports higher quality oil that is less polluting and a grade which is used in newer plants.

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Electricity production and consumption data from the provinces has been overstated say experts making the decline in economic growth in China look less severe than it really is. Coal stockpiles at one key storage location in Qinhuangdao port reached 9.5 million tons in June, says an analyst for Wood Mackenzie, global energy consulting firm, a level not seen since the level of 9.3 million tons in November 2008 during the height of the 2008 financial crisis.

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Even as China is investing more in the economy and workers are working fewer hours, the unemployment rate is increasing to 5.3% in Feb 2024, youth unemployment at 15% previously estimated at 22% in June 2023 before a new methodology was adopted.

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The risks facing China of slow growth and a bubble economy as the new leadership of Xi Jinping takes over in 2012. The export model for the economy is coming to the end of its run and the new leaders have to come up with a new plan for the future. At the same time they face the interests of state owned companies, banks and local governments interested in maintaining the status quo.

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Greg Ip says what a difference US policy under DJT has made for energy independence and for exports. US economic growth is affected only slightly as it exports oil and LNG. Forecasts by Citi revised for the US for economic growth by only 0.1% downward for the Iran War, for the European Union by 0.4%. EU spends 1-2% of GDP to get imports of LNG and oil. US gets 0.2% of GDP for the oil and LNGit exports.  The US is in a strong position with oil policies to increase production and there is also additional supplies from Venezuela that can be added to replace Persian Gulf supplies. Which is why DJT can tell the world and the Europeans, Japan and China to get their own oil and do the job of opening Hormuz because US does not get any of its oil and LNG from Hormuz straits. In 2025 EU gets LNG from Norway 89, US 81, and Russia 37 in billions of cubic meters of imports for total in 2025 of 207 down from 257 total in 2021 because of conservation. US LNG will increase as US sells more LNG to Europe in 2026 and 2027 and reduces the little it imports from Russia. EU is doing a good job of conservation that the US can adopt to export even more to India and Japan replacing some of the supplies from the Persian Gulf nations. ...

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Xiongan, China, 60 miles from Bieijing, a new city being built from scratch at a cost of $93 billion in this report in the WSJ in Feb. 2025. 

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Chinese sanctions against Micron will affect only 1% of its 10% of worldwide sales in China. Micron says it is committed to the Chinese market and plans to invest $600 million there.

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This NYT report says there is scandal fatigue among Republicans and a sense about Mr. Trump that his time has passed. Much of the political gains made by Mr. Trump in 2017 were a result of the failures of president Bush within the Republican party wasting national resources on 2 remote wars while infrastructure was neglected, and the neglect of manufacturing communities in the US with jobs outsourced to China that presidents Bush and Obama failed to stop. With president Biden ending these wars period. And with Mr. Biden getting the legislation passed to put workers and families, American manufacturing, American infrastructure to the top of the agenda, the focus has shifted to China and Russia two countries that gained during the largely failed Clinton, Bush and Obama presidencies. The Ukraine war and China's belligerence over Taiwan remain an ever present risk. President Biden has articulated American resolve in this situation in a way that matches another president Harry Truman when he addressed the Soviet expansion in Berlin, then Greece, then across Eastern Europe, not seeking conflict yet not shirking responsibility for the free world. It is this new context in which the sordid affairs of a political outsider are presented to the ordinary American struggling to make a living during a cost of living crisis in 2023. ...

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The mysterious activities and losses of a South Korean/Japanese venture capital company Softbank which has been part of the massive misallocation of capital away from infrastructure and health care services during the decades before the pandemic. It has emerged recently as the mystery investor in options on tech shares that led to shares losses of 7 billion pounds for Softbank.

It lost half of its value in an earlier dotcom crash. A few investments in China during the early period of its development based on gut feel of the founder, including Alibaba an e-commerce company based on Amazon's success in the U.S. and other investments in China, is the basis of its business model. This model puts huge amounts of U.S. and foreign capital with estimated pool of capital at $100 billion into ventures that set the wrong priorities for investment- leading to misallocation of capital at this time of the pandemic. 

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Where do you place a winner of the Democratic primary in Maine, Graham Plattner, an oyster farmer who dropped out of college at George Washington University, served briefly in the Middle East wars of Bush and Obama, and had PTSD. Is he working class, middle working class or is he from a downwardly mobile professional class considering he has parents who are well educated and father a prominent lawyer in Maine? Plattner easily defeated a 3 term governor of Maine with his average working class demeanor and language. He is for universal health care, (Medicare for All) universal child care, affordable housing, affordable college. Politics in the US has been moving away from the simple divisions before 1950 created by the Industrial Revolution- the workers in factories and the owners of capital allied with the professional middle class. The few owners of capital mostly college educated allied with people from the non college educated workers in factories who are conservative in their values and beliefs and on the other side the college educated professional middle class now downwardly mobile because of the many recessions and high unemployment from frequent financial crises, with college costing $80,000 a year putting them in deep debt. There is today in the WSJ a story of a professional worker who at $194,000 a year salary is not able to payoff $15000 debt which owners of capital have set at 26% interest and is in downward spiral. Some of this comes from large college and other debt. There is says WSJ Analysis $1.25 trillion in credit card debt alone with highest delinquency rates in decades in 2026. Cost of living has only made things worse and some of this happened as Biden poured money into the economy to help people hurt by the pandemic, yet with some short run consequences with demand strong businesses including hotels, restaurants and grocery stores, auto dealers, jacking up their prices by over 20% in 1 year and Biden failing to respond, getting overwhelmed by open borders migrants under Mayorkas and Harris (also hit by a sudden Venezuelan migrant influx). This is the America one has today- a confusing mix. This in reality means Democrats may take issue with Democrats, Republicans take issue with Republicans, and Democrats join with Republicans on issue by issue basis. It might actually be rational than irrational. On cultural issues if the country has gone over its head and moved too fast on some issues that are not for the general public good, people of different backgrounds can come together to get the best path. On economic issues things are never so straightforward, there are unpredictable consequences and the rules of economics are really not so straightforward either.  Providing relief can mean the government shouldering the burden as during the pandemic which it should, yet with caution as businesses can use the excess demand to raise prices and one is back to square one with everybody worse off as happened with Biden. Migrant flows and fears of insecurity in public spaces can lead to a severe public "discomfort that can waylay the best intentions of a Harris or Biden, leading to public "backlash." In fact the title of a recent book is "Whiplash." Current books include Floridan Marco Rubio's "Decade's of Decadence- How our Spoiled Elites Blew America's Inheritance of Liberty, Security and Prosperity." Rubio means it. Its authentic because as Rubio says repeatedly, his parents could make a living in the 1960's working in a factory with decent wages, low cost of living and low cost of college, the arithmetic between salaries and what you needed for decent home in suburbs and sending children to good public schools, then to college, all adding up. The result is that Rubio could go to college and serve in the Florida legislature. Rubio says in 2026, after the elites under Bush and Obama and faulty economic theory shipped all of our factories to China, that the story of his parents and his education would simply be impossible. This is what he told people in India on his first visit last week. His parents were Cuban immigrants, yet he identifies with Spain and with western civilization, a devout Roman Catholic. Rubio is a Republican, and is in large contrast with Alejandro Mayorkas, also from Cuba, and Biden's Head of Homeland Security. This is the mix of people and representatives in Congress,  business people, small business owners, professionals, that we have today in 2026 in the US. Plattner and Rubio, one a Democrat and one a Republican- both have something in common. Plattner also has general disdain for "the corporate interests, the billionaires, the Washington DC elites, and the establishment politicians."  The winds are blowing in the direction of getting things right- remembering that Eisenhower continued the work of the Kennedy and LBJ administrations (Eisenhower built the Interstate Highway System for instance, and LBJ gave America Social Security and Medicare). Before that Franklin Roosevelt a Democrat built on the work of his uncle Republican Theodore Roosevelt (TR gave America the idea of good governance and built the US Navy, FDR fought the Depression and stabilized a faltering economy after mistakes made by Republican Herbert Hoover could have happened even if Hoover was a Democrat. FDR was himself from a wealthy New York family and when he first met fellow New Yorker Frances Perkins before his struggle with polio, a haughty New York gentleman. That was before Frances Perkins as FDR's Labor Secretary joined forces with Roosevelt to give New York a modernized administration governance structure by 1940 that was applied to all 51 states after 1950. It allied labor with capital with fairness for all, and was the first such modern structure of this size the world had ever seen, which was the fundamental strength of the United States of America. It was imitated in Asia, first in the Shanghai region then China, and first in the Ahmedabad region and now India. The US is faced with the challenge of recreating and rebuilding this today, as first China, then India remind America of its roots which they have followed in their own style and culture.  First good governance, then good institutional structures, alligning labor and capital with fairness for all, strong affordable + accessible educational and healthcare systems, and investments of capital and labor for infrastructure + industrial development. ...

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The tech boom bust since 2000 that has hurt America and Europe and which also laid the foundations for the loss of manufacturing and technology to China, ceding American leadership and critical advantage, is shown here in the WSJ. The role of the finance sector  is explained here. That has added one more factor to the factor of endless wars in the Middle East, where American and European investment in healthcare, education and new infrastructure was somehow diverted away, and much of America's and Europe's resources wasted- or not turned to the benefit of the people of America or Europe.  One financial firm that rode the tech boom to the hilt finds itself with unacceptable losses except in a severe recession. Tiger Global Management was using tens of billions of dollars from pensions, endowments and rich clients riding on some of Silicon Valley's hottest stocks.  With the plunge in tech stock values including startups in which Tiger pushed into aggressively now facing large losses after hyper valuations, Tiger's hedge fund which managed $23 billion at the end of 2021 was down 52% in 2022. Another of its funds that managed $11 billion has lost 62%. WSJ says this wiped out two thirds of the gains Tiger has made in the tech stocks since its founding. In addition large writedowns are expected on its venture funds valued at $64 billion at the end of 2021, says WSJ.  WSJ says cheap money (money somehow diverted from infrastructure and funding manufacturing in China instead of the US now goes by the misnomer cheap money) reshaped Silicon Valley in the last decade, as pension funds, rich investors and celebrities turned to well connected money managers such as Tiger to put money in tech stocks and startups. This WSJ report says compared to Sequoia Capital and an earlier generation of venture companies Tiger Global is simply not interested in management of companies it invests in, taking a broad brush approach, using Bain Capital for research, and trying to haul in a large load of fish like trawlers at sea hoping for some companies to make big gains. Many pension funds such as Calpers California's public pension fund invest in Tiger with a $400 million investment. WSJ also reports that Tiger Global's venture funds do not reflect the realities of the tech business as venture stocks will reflect the drop over 2022 and 2023, including its ByteDance Chinese tech investment which will need larger writedowns. Tiger has also not hesitated to get into cryptocurrency which has loss of about $1.5 trillion dollars. It is of interest to note that Julian Robertson, hedge fund manager of the 2000 period (when Clinton-Bush were US presidents) who ran Tiger Management provided the impetus for Mr. Coleman, then 25 years old, for the start of Tiger Global. Julian Robertson closed his fund in 2000 during the dot com bust. Coleman hired a Blackstone analyst and started on the next cycle of tech with social media platform Facebook now Meta, followed by China's JD.com as investments in a new China boom were started. The end result is that during a period of Middle East wars under Bush and Obama, and building dependence on Russian oil and gas supplies under Schroeder and Merkel, China was the gainer as the US and EU lost much of its manufacturing and technology to China. During this period US and Europe neglected investment in infrastructure that would benefit the people of America in ease of living and quality of life. Just as money was wasted in wars much of the tech investment was wasted. The companies that added value over time were started long before and relied on sales growth and new products that revolutionized their field such as Apple with smartphones that started well before the nineteen eighties, Amazon with logistics and its own style of management, Microsoft from an even earlier era. Tech monopolies Facebook, Google, and others would not be missed much in terms of real progress for the people of America. The cost is many decades of ceding manufacturing and technology advantage to China by US and the EU led by Germany. China 2030 and the war in Ukraine with China's support have shown how fragile the foundations have been with weak political leadership and a finance sector running backwards in terms of America's and Europe's strengths in new infrastructure, better healthcare, services and education for the people of America and Europe. Leaving it to the Biden administration and a new coalition of Greens and Scholz in Germany to begin the task of rebuilding America and Europe on strong foundations, including the dignity of the workers and families, that makes who we are and what we believe in, and why the free world believes in us. ...

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Renewed warnings about the bubble in housing prices in China. Earlier warnings came from Krugman, Lardy, John Taylor. This one comes from Nomura economists Zhiwei Zhang and Wendy Chen. Could the government's action to curb rising housing prices not be adequate leading to a financial crisis as early as 2014, is the question posed by Zhang and Chen. They cite the rise of housing prices by 84% from 2001 to 2006, before the financial crisis of 2008 in the U.S., using the Case-Shiller housing price index. One problem- the government statistics may have underestimated the extent of the bubble. China's official index shows housing prices rising 113% in major cities from 2004 to 2012. Zhang and Chen say this is much smaller than the actual rise because it includes older, lower quality housing property. They cite an academic paper that adjusts for this and finds prices jumping by 250% in the period 2004 to 2009. Another problem is that China's housing prices growth slows after government action but then resumes the growth, leaving the risk exposure at the high level as before. Because the local governments are tied up in the housing bubble the problem would hit the banking system. About 14.1% of the outstanding bank loans are to local government financing vehicles, and 6.2% to property developers, according to Nomura economists. The declining potential growth rate in China means there is less room for bad loans to be absorbed by hyper growth levels than in the past. Errors in policy can magnify the risk including loosening monetary policy and exacerbating the bubble at the wrong time. In the absence of errors the risks still remain requiring the sale of public assets to bail out local governments and banks. The argument made by Krugman and other economists has been that China is not immune to the risks of a housing bubble going bad, in any way less than Sweden, the U.S., Spain and other countries, requiring bailouts of banks....

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China's State Internet Information Office chief Lu Wei, 54, is a Communist Party official who assumed office in 2013. He attends many of the internet conferences and gatherings in China and overseas, loudly explaining China's Communist Party line that "respect for national sovereignty" on the Internet should be adhered to. Mozur and Perlez reveal the vigorous personality of Lu Wei as he argues for this view of the Web at gatherings, in sharp contrast to the way younger generation social media users and business users see the internet. Lu Wei spent his early years as bureau chief of the state owned Xinhua News Agency in southern Guangxi Province. He was promoted to positions as secretary general and vice bureau chief at agency headquarters, and to vice mayor of Beijing in 2011, chief of the city's propaganda department. He came into prominence following an article in the Communist Party journal "Seeking Truth," after pointing out that China needed to manage the way information about the country and the Party is presented using the new information technologies. He also perceived the risks posed by distorted or incorrect information to financial markets, and economic security. This was confirmed the following year with the rapid spread of reports about a high-speed rail crash in Wenzhou, China, and in numerous other incidents following this, as social media reports that could not be confirmed spread quickly in out of control fashion. He now is the director of a new Central Internet Security and Informatization Leading Group, headed by president Xi Jinping, with the task of coming up with a policy for balancing views of openness needed for the economy with government views on internet oversight. This is not only a political matter, as Chinese officials face the challenge of how to get the public to vent views on critical matters such as public anger about pollution, food contamination, contractors and badly constructed housing in a recent earthquake, mismanagement in the railways ministry, and a whole range of issues related to economic development, health and public safety. ...

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The Czech Republic brings an amateur baseball team of firemen and teachers to Tokyo World Baseball games and wins 8-5 over China.

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The documentary "Last Train Home," directed by Lixin Fan, shows the life of migrant workers and their families in China. Fan sporadically spent 3 years with one family, Zhang Changhua and Cheng Suqin, to capture glimpses of this family's life as one of China's 130 million migrant workers. The family left a village in Sichuan province, to work in a factory in Guangzhou, which manufactures denim jeans. For 7 days a week -once working 15 hours a day for 29 days straight- the Zhang family works continuously, just to send money back home to the grandmother who raises 17 year old Qin and another child. The daughter is rebellious as she is resentful of the parent's absence. This is the story of migrant families throughout China, the quiet hidden ordeal, that is behind the cheap products available in western countries. And Fan documents this well with scenes at the railway station, as the family catches the last trains back to Sichuan, for the yearly trip back to the village. There is a whole society in transition, and there are many sides to this story, this is the human one of families caught up in this transition. Lack of farm subsidies and taking over of farmland for building and construction has hurt life in agricultural areas. The Communist party has made dissent difficult. And the imposition of a decades old registration system that denies education and social services to migrant workers from the villages, creates huge strains on family life. Fan says- before the showing of this film at the IFC Center in Greenwich Village- that he hopes to raise questions in the minds of viewers. Does the blame for this go to the government, the factory owners and companies, or the West, something Fan says he is not able to answer. That there is little official opposition to the film- in the same manner that the suicides at Hon Hai, and the factory conditions there and in other factories across China, are being freely reported- suggests that China is coming to terms with the different angles from which to view the economic transition that has taken place over the last two decades. It is also a belated recogniton of the whole range of questions raised by a singleminded policy of manufacturing for western markets, especially when these markets with debt-laden consumers may present huge uncertainty in the future....

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This article is a must read for everyone to know where our plastic and other paper waste is ending up. With China's ban on importing plastic waste the stuff is being shipped to India, Malaysia, Philippines and Vietnam. Now these countries are turning it back. Who needs sometimes contaminated waste. In the U.S. it ends up mostly on landfills. It is a health hazard as one recent story of waste shipped out to a part of Chile shows- with health problems for people in the vicinity. The WSJ has done an excellent story with diagrams and pictures in this exceptionally good story we recommend for our readers to know what is happening worldwide with plastic waste.  There is increasing education of the harmful effects of plastic and there is a government campaign in India supported by the prime minister Modi to reduce use of plastic bags and find ways to dispose off local plastic waste. In the light of this why would India or Malaysia or any other Asian or Latin American or African country want any other country's plastic waste, particularly when it is a health hazard. In fact China for so long allowing importing of plastic waste till recently so it could be processed with low cost labour and reused for plastics production is incomprehensible, considering the health risks involved. ...

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President Trump announces a $ 16 billion farm aid program to help American farmers hurt by Chinese tariffs on American agricultural products. The money goes directly in payments to farmers. Mr. Trump sees the tariffs on Chinese products as paying for the program.

The Trump administration has blacklisted China's Huawei  and president Trump says that he considers it to be a threat to national security. He also sees it as a bargaining chip in future trade negotiations with the Chinese. China's president Xi sees his country's national sovereignty in how it sets its own economic policy and manages its economy as an issue. Both sides are far apart. Xi even cited the Long March led by Communist leader Mao to Yenan in the 1930's as an example of the fortitude needed by China in dealing with the American challenge.

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Inflation is over 2% in Japan for the 22nd month. Decline in working age population by the 1990's, the shift of jobs and factories overseas, and the banking crisis all led to deflation in the Japanese economy. By 1998 inflation was setting in and has continued for two decades to 2022. This could happen in China as it's economy faces similar problems which is why linear projections from the last 10 years for China are misleading and erroneous, just as linear projections for India from the previous decade's growth were misleading and erroneous after 2014. The second decade after 2024 is likely to lead to major investments in infrastructure leading to India joining the developed nations.

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Slower growth for luxury car sales in China in 2013. German carmakers BMW, Audi and Mercedes are strong in this segment.

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The Stimson Center looks at the closing of an era of Conservative politics in Japan which ended in 2025 after the death of Shinzo Abe and the 2 year premiership of Kishida. Interview is conducted by the Stimson Center of a senior Japanese political figure with 30 years of experience in the Foreign Service, and the author of the only English language book on Shinzo Abe, reflecting the paucity of research on Japan. Shinzo Abe was premier for a short time in 2005-2006 and for a full term in 2012. He made changes to Japan's SDF, its partnership with India, Australia in the Quad, and his economic policy which increased women's participation in the economy. For the first time in post war Japan there was a new sensde of confidence under Abe and he is missed sorely in Japan today. Yet as this senior Japanese politician says, Japan has changed the way the US and Europe have changed, and nationalist politics are replacing old Conservative politics of the LDP. In a way also how the deindustrialization of US, Europe and Japan has also taken place discrediting that era. Takaichi Sanae is itself a representative of the new era, as she did not hesitate to say Japan would get involved if China attacked Taiwan. Her popularity is at 62% and she has called a snap election, as she came in to replace Shigeru Ishiba in October 2025 and was not directly elected PM. Yet in the long view this is also a misconception because neither the Stimson Center or the interview participants had a keen sense of who Abe really was and Abe's grasp of the history of the Kamakura period of Buddhist Japan and China, India, of the 12th century before the foreign invasions from the north. One of Shinzo Abe's biggest legacies is the relationship that was close to his heart, the relationship with India and prime minister Modi. This week chancellor Merz of the Federal Republic of Germany was at the kite festival with PM Modi in Ahmedabad and at the Sabarmati Ashram of Gandhiji. The same degree of warmth shown by the German leader and Modi reflecting Vivekananda's time in Germany, was seen long time back between Modi and Abe. The bullet train project Mumbai to Ahmedabad and the ones that follow across India are a testimony to the warmth shown by Abe for India, and his knowledge of history from the Buddhist period in India when by the 12th century in Japan in Dogen's time Tenjiku (India) was the sacred homeland of Buddhism. Today India has revived the Buddhist traditions and centers of Buddhism, the universities and research centers for Buddhism from that period in Indian history. Buddhism started in India near Nepal in what is now Bihar state at Sarnath and Kushinagar, and spread through China to Japan and Korea. The whole continent of Asia would reflect Buddhist ideals and ideas without the intervening period of Vedic culture in India and China's Mongolian and Manchurian northern invasions, and the periods of European colonialism. Today Buddhism and The Bhagavad Gita are itself strung like pearls on a string as the Gita itself says, part of the long spiritual traditions of three nations- India, China and Japan, and of the many others Vietnam and Korea. ("All these worlds have their rest in me as many pearls on a string." -Mascaro tr. of Bhagavad Gita, Penguin). As Asian nations and peoples come to their own inner selves, find their inmost self, this is the culture that really pervades all of Asia. ...

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The lockdowns and war in Ukraine are affecting gasoline and food prices in China. Vegetable prices are up annual 17%, fruit 4% and flour 5%. Gasoline prices are up 25%. Shenzen, Jinlin and Shanghai are in lockdowns.

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Floods add another layer to the problems created by the pandemic in China, Japan and Bangladesh. Bangladesh is one of the hardest hit countries with Cyclone Amphan affecting 2.4 million people. Here Sheikh Hasina, prime minister of Bangladesh and chairman Climate Vulnerable Forum describes the problem Bangladesh is facing. Rising sea waters could lead to the abandonment of coastal and low lying regions on the coast by mid century, with Bangladesh, India, China and Indonesia being severely affected in Asia.

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The new national security law put forward for Hong Kong in China gives key powers to Beijing to enforce national security In Hong Kong. A dedicated national security office will be setup in Hong Kong to make assessments, advise and supervise local authorites. This is seen as a move to unravel the legal autonomy Hong Kong had under earlier agreements with the UK that resulted in the transfer to China.