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The Venezuelan government provides gasoline to people in the country at a few cents a gallon- almost free. Even Saudi Arabia, the Emirates and Kuwait which have way better financial balances and dollar reserves do not provide gasoline at such prices. The result is chronic shortages of basic parts and other imports because the government does not have enough dollar reserves for imports. Venezuela devalued its currency by 32% recently, making imports more expensive and pushing inflation up even higher to 28%. The problems it creates are excessive and wasteful use of gasoline, and free gasoline that then provides consumers money to pay for surging cost of everyday imported products. Nullifying any real benefits when shortages, inflation, dilapidated infrastructure and lack of development and jobs, are taken into account. The lack of capital to invest in the oil industry has led to declining production making the situation unsustainable. Yet neither party of Maduro or Capriles in the upcoming April 14, 2013 election, following the death of Chavez, supports ending this subsidy. Efforts to end the subsidy by president Carlos Andres Perez in 1986 led to riots and about hundred deaths in police response, and a coup by Chavez, then a military officer, a few years later. Under Chavez the subsidy was extended to the level at which gasoline is about 4 cents a gallon. Compare this with the price in neighboring Colombia at $4.72 a gallon, and Brazil at $5.40 per gallon. Consumption per capita in Venezuela is excessively high, about seven times per capita than neighboring Columbia. The investment in infrastucture is hobbled by lack of capital, the capital Caracas dilapidated, and no major infrastructure projects taken up by the government. It costs Venezuela 8.6% of GDP or $27 billion to pay for the excessively high subsidy, compared to 3.2% of GDP going to healthcare spending and 5.1% for education. In comparison Indonesia, another developing country, uses 2.5% of GDP or 21 billion for its subsidy for a population of over 200 million. It is not that a fuel subsidy is provided, but the entitlement to free gasoline that makes Venezuela the lone exception. There is a reason why prices in Brazil and China, large developing countries, price gasoline to motorists at over $4 a gallon- to discourage excessive and wasteful use, and release scarce capital for infrastructure development, building dollar reserves for imports of machinery and equipment, and other uses in industrializing economies. Compare Venezuela with Bolivia under the socialist government of Evo Morales. In 2010 Bolivia increased its price of gasoline by 80%. The price in 2013 is about $2.00 per gallon. Morales cushioned the increase by increasing salaries in the health and education sectors, armed forces and police by 20%, and increasing prices of locally produced wheat, corn and rice by 10%. Morales said he did this to reduce state subsidies of $380 million for $660 million in gasoline imports, of which $150 million was siphoned off by smuggling gasoline to neigboring countries. Incentives were provided to oil companies to produce gasoline in Bolivia to reduce imports. ...

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WSJ reporters McDowell, Otto and Murray's interview with Indonesia's president Joko Widodo in December 2014, focusses on Indonesia's need for foreign investment for badly needed infrastructure development. Widodo says Indonesia will compete with Vietnam, Malaysia and other countries to attract foreign investors and offer better terms to attract projects. Widodo plans to take up reform of state electricity company PLN, open a limited, national one-stop investment center, and tackle land acquisition for the Adaro power project in central Java to be built with Japanese investment, in coming months, always following a deadline. His goal is to streamline processing and approval of foreign investment projects so that the time is cut from about a year to a few weeks. Investors such as Samsung have preferred to invest in Vietnam, and other investors have preferred to invest in Malaysia, because of a deteriorating foreign investment climate under the previous administration. Indonesia remains dependent on coal and commodity exports to China. The goal says Widodo is to increase the growth rate from 5% to 7% by 2016. This includes revising the old structure of contracts with oil companies to encourage oil exploration investments by foreign oil companies, according to Economics Minister Sofyan Djalil. Indonesia's oil production has declined in the last decade and it is now a net importer, a situation similiar to that in Mexico....

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Boeing plans to have a new facility in China complete assembly of its 737 jets by the end of 2018. The finishing center is being built near Shanghai. Boeing's order book is up to 5800 jets at a value of $518 billion. About one fifth are in deliveries planned for China. Inflight entertainment systems, seat systems and other finishing for aircraft will be done at the new facility. Boeing continues to see this a a part of doing business in China even as tensions have increased with China over tariff issues and market access. Boeing says it will continue to assemble 737s at its plant near Seattle, and send some planes for completion to China. Sales to Iran will require following Trump administration guidelines.

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When Paulson met with his staff a few days ago he stamped his hand on a marble table asking his staff to stop their arguments with politicians who supported Fannie and Freddie because it would result in a war which he did not want as reported in the New York Times recently. Representative Barney Frank is mentioned as one of the politicians supporting the management of Fannie and Freddie. So it happened that to the very bitter end these managers used their lobbying and political donations to distort the policymaking progress right under the eyes of the Republican administration that knew what was going on and media like the Wall Street Journal that has warned about the dangers at Fannie and Freddie for years. One question remains why under the original mandate for Fannie and Freddie were the companies not banned from political donations and lobbying as they were backed by a government guarantee and at the same time could distort the process of supervision by lobbying and political donations to Congress if this was allowed. So in the end its the biggest failure of the political process and of setting up of such companies that once set up they were beyond anybody's control. Josh Rosner, an analyst at Graham Fisher an independent research firm in New York, makes an apt comment: "since 2003 when these companies' accounting came under question, policymakers have done nothing." One can repeat nothing, and the politicains in Congress who received the donations will go on with their political ways while the government and the public shoulder the burden of billions of taxpayer dollars in the biggest bailout ever, considering the size of these two companies and what at stake for the country's housing markets, and considering that foreign governments like China have invested billions of dollars in these companies and needed assurance to continue to buy and hold Treasury bonds....

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Declan Walsh's article published on May 19, 2013 in the NYT, was written and reported before his expulsion by the Interior Ministry of Pakistan. It surely must rank as an exceptional piece of journalism and possibly the best that has been done on Pakistan in the U.S. media for decades. Walsh focusses on the Pakistan Railways once part of the British Indian Railways which pulled together all of South Asia from Burma and the Afghan border to Ceylon, an engineering feat accomplished by the British which integrated India (and Pakistan) into nation states. He takes a cue from the India patriot Gokhale's advice to the the young Mohandas Gandhi to travel by rail to see India, its agricultural interior and small towns. Walsh rides the Awami Express from Peshawar near the Afghan border to Karachi, in Sindh province. Along the way the train passes Sukkur, crosses the Indus river, reaches Lahore in the Punjab province, and makes its way to Hyderabad in Sindh province near the Thar desert and India. Walsh stops at each point to talk with railway personnel, describes passengers, and the changing terrain. The strains on the society from extremist violence, the lack of investment in the railways, corruption, and railway ministry officials who diverted resources away from the railways, are described in detail, showing how conditions have deteriorated in the railways to this point. It also focusses attention on the need to modernize and rebuild Pakistan's railways. In China and in India railways play a huge role in the life of the common man, providing the major means of transportation and freight links for these large developing countries. By pulling freight business away from the railways and shifting it to businesses outside railways, a critical source of revenue was take away by a rail minister in the Musharraf government, which needs to be reversed. In the U.S., China and India rail freight business is a key part of the railway companies. There is a sense of despair in the railway people Walsh talks to, but his account also spells hope by bringing this to the attention of the outside world, to the public in the U.S. and Europe, even Japan, that what Pakistan needs is new investment, help with infrastructure. It sends a message to the new government to gird itself for the difficult tasks ahead to win the confidence of the people of Pakistan in a way that has not been done in the past. Falling behind is then both problem and opportunity in a modernizing world with new technologies that can transform the landscape....

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Italy's oil company Eni's new CEO Mr. Descalzi, is a 33 year veteran, who headed the oil exploration division under former CEO Paolo Scaroni. He faces the challenge of reducing its 5.1 billion euro debt at the end of June 2014, with the possible partial sale of its 43% stake in oil services company Saipem. Eni's stake has a market value of 3.5 billion euros. Other decisions he faces are to reduce geopolitical risk in Africa by selling stakes in its oil projects in Africa. Under Scaroni Eni sold a 20% stake in its Mozambique field to China National Petroleum Corporation for $4.2 billion. Delays at its Kazakhstan project ,chronic problems in Nigeria, the fighting between militias in Libya have hurt earnings and cash flow. Reducing risks in Africa is a priority because Eni aggressively pursued opportunities for exploration in places like the Congo and Mozambique, so that a larger part of its oil comes from unstable regions than other large oil companies. Profitability from these fields is not what it used to be because of oil theft in Nigeria and the fighting between militias and the government in Libya, with North Africa coming in at $18 per barrel and sub-Saharan Africa at below $15 per barrel, compared to $30 per barrel from Kazakhstan for the last 3 years, according to Kepler Cheuvreux. Another problem the new CEO faces is the 800 million euro loss at the refining operations in the last 2 years. The government has a 30% stake in Eni, making refinery closings a sensitive issue. Refinery product demand is down with the economic crisis in Italy....

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China's State-Owned Assets Supervision and Administration Commission- which oversees the operations of 129 largest state-owned corporations- and the Chinese Communist party's central organization department, have placed two broadsheet newspaper pages of ads for 20 senior management positions in industries ranging from nuclear power, auto manufacturing and textiles. Only some of the positions require Chinese citizenship, others are open to overseas applicants. The ads appeared in major Chinese and English language newspapers, and on major internet portals.

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Jim Tankersley of the Washington Post looks at the myths and realities of trade following incorrect statements made by Donald Trump about international trade. For example Trump suggests that Japanese automobiles imports are a big problem, though the imports have been cut by over 50% since the 1980's with Japanese companies Toyota and Honda making cars in the U.S. in Kentucky and Ohio. Detroit faces competition from foreign manufacturers based in southern states, including Alabama for Mercedes Benz and Tennessee for Nissan. Mismanagement including lagging in fuel efficiency and quality, and higher health costs for older workers were problems facing Detroit in the past decade. The Obama administration provided support to the auto companies to make the recovery following two bankruptcies in the U.S. auto industry, showing the U.S. has intervened as needed and the auto companies have made transformational changes. A big problem says Trump is the trade agreement with China which he promises to renegotiate. Tankersley points out that no such treaty exists. The U.S. agreed to China's entry into the WTO. This is not something the U.S. can renegotiate as the WTO sets rules for trade for all countries. The likely result of a shift away from Chinese imports would be more imports from countries such as India and Vietnam which are lower cost producers than China. Trump says some of the 2 million jobs lost in the past 2 decades will come back, yet the shift may be towards lower cost countries from China, with fewer jobs coming back to the U.S. High tariffs would not lead to the growth Trump predicts. A study made by Moody's Analytics at the request of the WP shows a Trump move for high tariffs would lead to a recession and lead to mass layoffs as other countries imposed their own tariffs, leading to large loss in U.S. exports. Trump has made claims such as telling the Post that $19 trillion in federal debt could be paid off in 8 years without raising taxes by fixing trade. No grounding on facts is provided by Trump. One of the failures of the media in the 2016 election campaign is the failure of the media to provide scrutiny for candidates claims and wild exaggerations, which have gone uncontested or unquestioned, or without the persistence till satisfactory answers are given by the candidates making them. Especially when the stakes are so high, for the U.S. and for the global economy. ...

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Nickel cadmium batteries - this year 2008 the European Union is banning the sale of all nickel cadmium batteries. Question is why is the US not banning them. And why are companies like Energizer, Duracell, P&G, Mattel, Toys R Us and Walmart still buying them? Why is Panasonic making them? A toy costs $1.50 less to make using nickel cadmium batteries. Are parents aware of what it does to workers making them? Are plants safe in developing countries especially in corruption prone coercive environments like the one in factories in China? Some of the owners of such factories are in Hong Kong, Hong Kong based companies, are they aware enough of the risks and the ethics of doing is? This story is of an engineer who was exposed to factory conditions in a company GP that was supposed to be a good company to work for, and few knew about the effects of cadmium in the year 1995 when she joined. The Panasonic factory is in Wuxi which is not in some remote part of China. And note this about 10% of China's arable land is contaminated with heavy metals such as cadmium according to China's own State Environmental Protection Agency, and the metals are entering China's food supply. 12 studies have shown unsafe level of cadmium in fruits and vegetables. Is this a necessary price of industrialization or is it possible to find a way thats better- a challenge for countries like India. Can there be better protection of workers and still have industrialization? Wouldn't it make sense that a motivated well treated work force will perform better in better working conditions. Aren't there costs involved for workers and owners of such plants. Owners also bear costs, bad press, medical payments, workers leave and good workers are hard to find in the wave of bad publicity and health risks, customers in the west refuse to buy the product, the company's brand name is tarnished forever, as would happen for GP in this case. The coercive patterns of using police to suppress publicity for a Hong Kong Company shows owners in Hong Kong have the same disregard for worker rights, even when living in an area that one hears talk about democratic rights. See the link to chemical spills contaminating a river in China also by a Hong Kong based company. ...

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Even though China has one of the largest stimulus programs, it hopes to keep its budget deficit down to 3% in 2009. But this does not correctly reflect the true cost of the stimulus program, as much of that cost is taken on at the local government level. Of the stimulus two year $585 billion investment program only one fourth is reflected in China's formal budget. Stimulus projects get quick approval and a partial financial contribution from Beijing with the local governments having to come up with the biggest share of the funds. As China's tax system channels most revenues to Beijing, the local governments are seeing an explosion of debt. These are liabilities not on the books but having the indirect support of Beijing. Without this local government debt China's total state debt is closer to 35% of GDP than the 18% shown in official numbers. See graph. And the government budget deficit will be about 4% of GDP in 2009 according to Deutsche Bank economist Jun Ma. Even before the stimulus local government debt was large, at about four trillion yuan, equivalent to 16.5%of GDP, as estimated by the Research Institute for Fisal Science, the think tank of China's finance ministry. In the first quarter new loans by state banks for infrastructure projects to government backed companies was 895 billion yuan, or 22%of the national stimulus package. Local corporate bond issues indirectly backed by the local government, totaled 102 billion yuan for Jan-May 2009. The government hopes that with economic growth and growing tax revenues paying back these debts won't be a big problem. ...

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The World bank president Robert Zoellick in an interview with Sudeep Reddy of the Wall Street Journal. He says its frustrating to see Europe respond to problems in banking, sovereign debt and competitiveness that have a chance to work, but only to find that the action is a bit late and a bit short every time. He says the Germans are right in insisting that credit cannot be given away freely, and that reforms have to be made. Yet these reforms in the case of Spain and Italy to increase competitiveness will take time and in the meantime both countries will need bridge financing. A direct recapitalization of European banks by the European Financial Stability Facility is needed to avoid this slow and continuous decline in confidence from negative news and uncertainty. Because the problem now is of a longer term nature with debt issues that will take time to resolve and energy price volatility, Zoellick says simply doing short term stimulus and monetary will not work, and a longer term plan needs to be implemented. Zoellick supported the China Development Report of the World Bank and China's DRC which called for a shift in the economy away from reliance on state owned companies and heavy infrastructure spending. Here he says the new stimulus plan for China was necessary because of slowing growth. Yet he hopes China's leaders keep this in mind as they develop solutions for the long term that avoid the rampant credit expansion and investment of the 2008 Stimulus, and come up with a new policy mix....

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Peter Navarro's thinking is genuinely felt and genuinely thought out after 20 years  at Harvard, UC Irvine and other universities, as an economist who abhors sitting in the office with textbook theory that has no relevance to life of working families in the heartland of America. He says of these textbook theory economists and the American companies that have recklessly shifted America's industrial base to China year after year and decade after decade- “The same damn fools who supported NAFTA, China’s entry into the W.T.O., and every other trade deal that was supposed to benefit America but only benefited Wall Street and the foreign nations screwing us. Those mainstream economists need to get out more often — maybe to Ohio or North Carolina or Pennsylvania or Wisconsin or Michigan.”  He says the 70 nations including the big ones Japan, South Korea, Taiwan, India, Britain and the European Union are already neogtiating with the Trump administration. What more proof does one want. The Nation will get a better deal as it is about fairness in world trade, and an even playing field. Navarro calls it "a beautiful thing." The three dimensional unique approach taken by Navarro, Bessent and Lutnick and by Trump is working, says Navarro. Fifteen decades ago A. Lincoln stated- "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise to the occasion.As our case is new we must think anew, and act anew. We must disenthrall ourselves, and we shall save our country."   ...

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Robert Lighthizer, U.S. Trade Representative, makes a passionate plea for the dignity of work in America, the founding principle for the society of opportunity that America has been and the reason it was settled by immigrants from Europe over 200 years. He points out that trade policy is not about geopolitics or about efficiency as others perceive, it is about what kind of society we want to live in. Is it about a society of opportunity? This is the foundation on which this American continent was settled by settlers from Britain and Europe, and the basis of the growth over two hundred years till the last four decades. From 2000 and China's entry into the World Trade Organization under president Clinton to 2016 the U.S. manufacturing base has shrunk with the loss of five million jobs, two million jobs lost to China in the period 1999-2011 alone. And 350,000 automobile manufacturing jobs to Mexico since 1994, one third of all U.S. automobile jobs. Without the initiative and hard work of Mr. Lighthizer both American workers and Mexican workers would be stuck in low paying jobs. The USMCA he negotiated changed all that by giving Mexican workers fair wages and American workers and manufacturing the opportunity for revival.  This view was also expressed by Intel founder Andy Grove, a founder of one of the first pioneer companies in Silicon Valley. Grove asked the question after seeing the outsourcing of production out of America and the condition of the American worker- he said for him it was about what kind of society he wanted to live in. It was all about the dignity of the American worker long ignored by economists who live in a world of theory and the elite that has lived for so long apart from the places where the fabric of American workers and working life was torn apart. It was a question that touched Andy Grove's heart just as it does for Robert Lighthizer and others who are fighting to make America a society of opportunity for the American worker and opportunity for the American people, for dignity in America. It also charts a new course for the French worker, the British worker, the Indian worker, as other countries learn from the American experience. We have covered Grove and Lighthizer from the early days of their leadership and wise reminders to the people of what America is and stands for. Lighthizer points out one huge error that makes the thinking of these economists and elite that have not listened for so long, more than a bit crazy, reckless and callous. He says there about half of 250 million adults who lack a college diploma in America. Historically manufacturing has provided stable well paying employment. Even if with investment in education they were taught to write software code, there aren't enough jobs for them. The combined total of jobs at Apple Google, Facebook and Netflix is 300,000 jobs. Never has so much been at stake for so many and defended by so few. ...

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Major decline in oil prices in Oct. 2014 as prices drop to $81 per barrel and are forecast to reach $70. U.S. oil production increased by about 56% or 3.1 million barrels a day since 2004. U.S. demand for gas and fuel declined 8% compared to 2004. Initially instability and wars in the Middle East sustained high oil prices in 2012-2013. Yet with growing output from shale and other sources in N. America and slowing economies of Europe and China, the situation reached a point in 2014 where supply exceeds demand. This shift more than offsets any instability in trouble spots. The situation affects the U.S. consumer favorably with an estimate of $1 billion in savings for American consumers with every one cent drop in price at the gas pump, by one estimate from Deutsche Bank analysts. Typical American families gained an extra $50 a month from the decline June to October 2014, according to analysts at Gasbuddy.com. The declines are a boost for the slowing economies of Europe, Japan, China, S, Korea and India. China's imports for 2015 are estimated at 61% of oil consumption, using official estimates. In the current slowdown the lower prices offer relief. India which imports 75% of its energy benefits signficantly, as this helps lower inflation and reduces cost of fuel subsidies for state run companies. Russia is adversely affected by the declines as it depends on oil and gas exports for 50% of the nation's budget. Estimates by AFK Sistema economists show the Russian economy contracting in 2015 with oil at near $90 per barrel (Brent crude is at about $85, and WTI at $81 in early Oct. 2014). Russia's former Finance Minister Alexei Kudrin reflects opinion among Russian executives and politicians, when he told state television that Saudi Arabia may be pushing prices lower to target Russia's oil resource based economy and Mr. Putin, in an effort to broaden the effect of sanctions. (The Saudis have strongly protested the Putin intervention in Syria.) Venezuela has used $120 per barrel and Angola $98 for its budget, leading to a strong hit for the economy. ...

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As exports and manufacturing decline, China is continuing to maintain high rates of fixed asset investment with the focus now away from factory construction to infastructure like roads, bridges and rails. The National BUreau of Statistics reported that urban fixed asset investment expanded 26.5% in Jan-Feb 2009, compared to 26.1% growth rate for 2008. Fixed asset investment was 42% of GDP in 2008, according to JP Morgan strategist Jing Ulrich. Now it could go up higher to 45%. China's growth has been off-balance say experts, now it is becoming even more so. As long as factory construction as fixed asset investment a lot of new jobs were being created in the manufacturing sector, now these jobs are not being created. China's small and mid sized companies that generated about half of the 4.42 trillion GDP, like GenTech of Mr Yu profiled in the other linked article in WSJ, and which created 90% of the new jobs, are now contracting. With smaller private consumption, and the efforts to improve the safety net and provide universal medical care inadequate and coming late, domestic demand will not help balance the economy and boost manufacturing. Private consumption is only 35% of GDP in China, a much lower percentage than India. The comparable figures for the US are 71%, UK 64%, Australia, Canada, France, Germany and Japan 57%. The balance is now heavily skewed towards government spending. Investment spending from HongKong and Taiwan, the home bases of industrialists with made for export industries inceased investment by 1% in Jan-Feb of 2009 from the year earlier, compared to 17% growth in all of 2008. And foriegn funded companies have comparable figures of 2% for Jan-Feb 2009 compared to 15% growth in all of 2008. Real estate investment growth also fell to 1% for Jan-Feb 2009 compared to 21% for all of 2008. In short the other pillars of growth in housing, and investments from Hong Kong, Taiwan and the West are declining. ...

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...

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Differences between the U.S. and China on trade, investment and economic policy in 2015 during Xi Jinping's visit to the U.S.

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China's premier Wen is critical of China's large state owned banks for blocking reforms. In recent months there is growing sentiment against the large state owned banks because of the large profits made and the low interest on customer deposits for savers. The guaranteed spread between deposit and lending rates is about 3 percentage points giving the banks easy profits. China's largest banks, including Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank, show combined profits of $99 billion. These four banks and the Bank of Communications, China Development Bank, Postal Savings Bank, combined control 55% of all outstanding loans in China, and lend mostly to large state owned enterprises.