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Real estate prices are declining in Australia, with signs of overbuilding. Growing immigration, a commodities boom with higher demand from China, slow construction and foreign investors had pushed home prices higher. This led to a decrease of 2-6% in home prices in Brisbane, Adelaide and Melbourne, according to RP Data. Home construction in Melbourne increased by 40% since 2006, according to Australia's Bureau of Statistics. Analysts point to an oversupply of homes in Melbourne. Home and apartment prices in Melbourne declined by 3.9% in 2011, according to RP Data-Rismark.

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Sovereign funds should reach $8 trillion by 2011. China Investment Corporation has $200 billion. Much larger are Singapore $438 billion and Norway $367 billion, Abu Dhabi $875 billion, Australia has $50 billion and Alaska has $40 billion. And they are in a majority of the cases professionally run, can stabilize markets because they invest in the long term, often as in Norway's case push for better corporate governance, and invest in emerging markets. It could affect the dollar as their holdings of a declining currency may decrease and as they show preference for emerging markets.

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Home prices are surging in Australia in 2015, with home prices in Sydney up about 39% since June 2012, according to CoreLogic RP Data. As a multiple of annual income home prices in Sydney are at 9.8, Melbourne 8.7, and Wollongong near Sydney 7.5, compared to 6.1 for New York and 8.5 for London, according to a 2015 affordability survey by Demographia. Australia's surging home prices are happening just as the mining boom that powered its economy is winding down and unemployment is up to 6.1%. Interest rates are down to 2.25%, and low interest rates with speculative purchases are likely to fuel the market up further, say experts. About 40% of home loans approved in Feb. 2015 were to investors, increasing from 31% in 2009, according to official data. According to Australia's Reserve Bank the wealthiest 40% of the population have 75% of the debt. This surge when the economy is feeling the effects of the slowdown in China, and the rest of the world is cutting down on debt, puts Australia in uncertain territory....

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This report from Taiwan in DW.com points out that German opinion has changed significantly in recent years and is not reflected in Merkel policies. With a change in government to Greens, SPD coalition under Scholz of the SPD and Annalena Baerbock of Greens, German policy towards Taiwan is likely to change. Scholz is seen as having different views from Merkel and is likely to reflect public opinion more closely which is reflected in polls that show 58% of Germans not in favor of Merkel's China policy which moves away from the US. Germany also needs to consider NATO alliance and relationship with US which will be difficult with Merkel policies now that president Biden has made Indo-Pacific  with Aukus and Quad alliances critical to his administration. France has moved closer to India, which will mean pressures from the US and France and German public opinion for Scholz to  come closer to US and France in his policies. A sense that the Merkel period had serious issues and was "grotesquely" backward in childcare, education, digital modernization, infrastructure, climate change, as one German expert puts it, also will make SPD and Greens reconsider Merkel's policies.  After the election there could be a fuller reassessment of the Merkel years and further change in German public opinion as Germans see how much was lost in the later Merkel years in the lack of much needed change inside Germany in addressing the social and economic problems. Merkel may also be seen as having a sensitive relationship with the Biden administration which the SPD and Greens in their different orientation may not see in the same way. Biden's families and workers plan has much that Germans are looking for from the SPD and the Greens and on a scale of $3.5 trillion that the SPD and Greens may see as changing everything.  Population of India combined with South East Asia, Australia and Japan is also about twice that of China, which Germany will feel sets the path for a new policy that reflects a different Europe and a different Asia for the future. ...

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Research from Australian National University shows steadily improving conditions for migrant workers in China. Migrant workers were able to spend more time in cities- an average of 8.9 years. The hukou sysem ensures migrants return to rural areas when they have to raise a family. About 252 million migrant workers work in factories and construction jobs in urban areas. Migrants with children leave them with grandparents back home. Improving the conditions of these workers is important to reduce the wage and income disparities in China and to reduce inequality. About a fifth of the migrant population now has pension and health benefits. Creating a balanced economy with domestic consumer spending making a larger share of GDP also requires improving wages and benefits of migrant workers. Incoming prime minister Li Keqiang says in a statement on a government website: China "must take migrant rural workers and gradually change them into urban residents. This requires that we push forward household registration reform." If done seriously this will create a new kind of China as these migrant workers are integrated into urban society after years of being shunned and ignored by China's educated middle class. Professor Meng's research at Australian National University of migrant workers shows the proportion of migrant workers with unemployment insurance increased from 11% in 2008 to 21% in 2012. The research shows similiar figures for health and pensions. Improving their living standards also make it attractive for more young people from rural areas to migrate to cities increasing urbanization....

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Compromise reached at the October 2010 G-20 meeting in S. Korea to reduce trade imbalances, and for countries with current account surplus exceeding 4% of GDP (China 4.7% and Germany 6.1%) to bring these balances down by 2015. Countries with large current account deficits, Turkey 5.2% and South Africa 4.3%, were expected to bring their deficits down and increase national savings. The US is at 3.2%. The US proposal for a target was accepted by Japan as long as it was not a fixed target but a reference point. Germany was opposed, saying it was a return to planned economy thinking. China did not comment on the issue. Canada, Australia and the UK supported the US position. The compromise was an effort to continue pressure on China to redirect its policies away from exports to increasing domestic consumption, while still refraining from a fixed target. It also takes some of the pressure off a fast track currency rebalancing, with China expected to increase the value of the yuan, but given more flexibility than the rhetoric would suggest....

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James West, energy analyst at Barclay's Capital, who co-authored a survey of 402 companies, estimates that the oil industry will spend $490 billion in 2011 to search for and extract oil and gas. This is up 11% from 2010. This spending includes increases in costs for finding and extracting oil and gas in hard to reach areas. The largest companies, including Exxon, Shell, Chevron and BP, are expected to increase spending by 16% to $108.6 billion. Chevron recently announced a 29% increase in spending, partly to develop large off-shore projects in Western Australia, the South China Sea and the Gulf of Mexico.

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COFCO is the abbreviation for China National Cereals, Oil and Foodstuffs Corporation, which was the state company importing grain and other staple foods into China during the period before China opened up its economy. It is now a dominant company in China's grain and other staple products from edible oil, dairy products to bacon and beer. Under CEO Ning Gaoning, Cofco has transformed itself since 2004 from primarily being a grain importer to value added products, food processing, and technologies in the food business. Cofco is expanding rapidly overseas with deals and acqusitions, and has about $10 billion in state funds for acquisitions. Recent acquisitions include $2.7 billion for Dutch grain trader Nidera BV, and 51% ownership of Noble agricultural unit. Earlier acquisitions include vineyards in Chile and France in 2010, and Australia's Tully Sugar in 2011. Current plans are for acquisitions in the U.S. and Latin America. Revenues in 2014 were an estimated $63.3 billion. Interviews with cane farmers that are part of Tully Sugar in Australia show Cofco has managed the company well and won the support of farmers....

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With better currency reserves and lower debt the Asian countries are in a better position than in the 1997 crisis. But a big problem will be lack of export markets. In 1997 Asian countries could export their way out of difficulties and the devaluations actually helped exports. And domestic markets are weak with weaker currencies making imports more expensive. In the past 10 years consumption as a percent of GDP has fallen in China and elsewhere in Asia outside Japan, even as exports as a percentage of GDP have grown by about 30%. And this has implications for Russia, Brazil, Australia and other countries which send soyabeans, mining products, commodities and oil to meet Asian demand. Riskier still is the prospect as Stephen Roach of Morgan Stanley Asia reminds people. is that when the tide goes out you can see the rocks for the first time which were covered by the hyper growth of China. China may see a big increase in nonperforming loans for its banking system, loans tied to the real estate sector where prices are falling. ...

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The Australian government forecasts lower GDP growth in 2012- dropping to 3.25% fro 4% earlier. The government plans spending cuts of 11.5 billion Australian dollars over the next 4 years, which will further affect economic growth. The mining and resources sector boom is leading to an overvalued currency which is affecting growth in manufacturing, tourism, and retail sectors. Australia has two economies and this limits economic policy options.

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It took this long to do what would be done at the outset years ago- setup teen accounts that are private for Instagram. There is a warning in this that only thoughtful regulatory oversight at the beginning would prevent harm to parents and children. At this point the action does not address what only regulatory oversight by the government based on common sense about the interests of the people in education, mental health and children's education, can provide. This is to do what is done in China and other parts of the world where there are limits in ages, hours of use and what time it is turned off for young people. 

This is happening also when Australia and now Britain is removing social media from children which is the only policy that will make it possible to restore the health and educational level of young people after so much damage has been done.

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This WSJ story shows how China started its steel industry from small beginnings when Chinese leader Deng visited a Nippon Steel plant in 1978. He made the decision to go big with Baosteel, with an investment of $6 billion, with the words- "if we do it lets do it big." This was 36 times the Chinese foreign exchange reserves at the time. From 4% of steel production, this went up and up, passing the U.S. in 1993, past Japan in 1996, and in 2018 producing three times the steel of U.S., Russia and China combined, producing 923 million metric tons of steel in 2018, or more than half of world production of steel. With steel China was able to build its automobile industry, shipbuilding, bridges, infrastructure, high speed rail network. This was done using global demand, subsidies from the government, cheap loans and tax breaks. Markets worldwide were affected by substantial excess production in China. From Baosteel the spread of the steel industry to all 23 Chinese provinces led to China accounting for 25% of world exports. By 2016 5 million workers mostly from the agrarian countryside were employed in the steel industry, helping China transform itself into an rapidly urbanizing and modern economy. It was a period when the rail network was tripled between 1975-2017, with shipping companies that ensured access to Australian coal and Brazilian iron ore. From 2011 to 2017 Chinese steel dropped global prices by 57% triggering closure of steel mills in EUrope and the U.S. About a third of trade complaints since 2001 by G20 countries against China are about steel. After entry into the WOrld Trade Organization Chinese steel exports rose to 8% of GDP from 2%. Subsidies, cheap energy, and shift of agrarian workers to cities. U.S. investigations around 2006 showed Chinese steelmakers subsidies covered 30% to 45% of the subsidized value of steel pipes exported overseas. China's steel prices were set 20-40% lower than the U.S. China responded to complaints saying it was trade protectionism. The WTO rules call for full disclosing of all subsidies. This was disclosed 5 years after joining WTO in 2001, and only for central subsidies. Local government subsidies were not disclosed till 2016- the U.S. says 15 years late. Still the Bush and Obama administrations failed to take action. In 2018 Mr. Trump seized on this as a campaign issue that resonated with American workers in manufacturing communities across the U.S. In 2018 November president Trump announced a 25% tariff on imports of Chinese steel. A six month probe by U.S. officials had already shown 40% of sales value came from subsidies for corrosion resistant steel from China. The U.S. Trade Commission imposed tariffs of its own from 39% to 241%, with the Trump tariffs of 25% coming as an additional tariff to tackle the trade surplus with China. Meanwhile in China the government is closing uncompetitive smaller steel mills and in 2016 it combined baosteel with Wuhan Steel to create a larger company, and consolidate remaining companies. Baosteel now provides the steel for CIMC to dominate the steel container business, and to make ship to shore cranes, and make the San Francisco-Oakland Bay Bridge.  It also goes to show what can be accomplished from small beginnings for countries in the developing world from Asia to Africa and Latin America, with government and industry focussed on development and growth.   ...

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WSJ's Jeremy Page looks at Admiral Wu's efforts to build U.S.-China naval ties through relations with Admiral Jonathan Greenert, head of U.S. Naval Operations. Admiral Wu has the backing of Chinese president Jinping to expand the influence and capabilities of China's Navy. A skeptical Senate Armed Services Committee led by Senator John McCain sees the effort to enroll Chinese officers at U.S. naval colleges, and offers of visits to Chinese ports by U.S. aircraft carriers, as a ways to increase the capabilities of China's Navy. McCain and members of Congress are alarmed by the effort to build China's naval power on the Spratly islands to extend control over the South China Sea and beyond. Wu is the only naval leader on the 11 man China Central Military Commission, headed by president Jinping, which commands China's armed forces. He joined the People's Liberation Army in 1964 and in 1988 has commanded a group of destroyers. Wu as an advocate for a greatly expanded mission for the Chinese Navy following what is called the "century of humiliation" with the Opium War in 1842, is seen with wariness with close neighbors Taiwan, the Philippines, Vietnam, Japan, Australia and India....

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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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This story about companies in Australia that have tried a four day week shows employees using two mini weeks working Monday and Tuesday, taking off Wednesday and back to work for Thursday and Friday. It shows employees planning their Mondays and Tuesday miniweek in such a way that they can handle important work and meetings ahead of time. They come back recharged and renewed on Thursday, with Wednesday as the day to break up the work week in two. This has increased productivity at these companies. This is also a useful idea for older employees who work part time and work past usual retirement ages of 60 or 65 years as longevity increases in many countries. This enables retaining the vast experience of older workers in the workplace and promoting the health of older workers by keeping them active. As Japan, the U.S. and Europe and even China become aging societies this is becoming ever more important.  For worker on five day weeks this offers creative ideas to have a four and half day week giving workers a morning off or an afternoon off to recharge with sports or recreation activity or exercize, then coming back to work recharged in the afternoon. Other variations can also be used which promote productivity and employee satisfaction to get more of the most valuable work done more effectively and with enthusiasm, pushing less important work and time wasting out of the way. Employees generally would take charge of their work day and come up with creative and efficient ways of organizing their mini work weeks. ...

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The Pilbara iron ore region in western Australia in red desert 675 miles north of Perth, is where China gets a lot of its iron ore, mainly from mines run by BHP, Rio Tinto and Fortescue. With the Chinese economy slowing Australia's growth rate dependent on commodities exports like iron ore is declining. Australia's central bank has lowered growth forecasts to 1.5% for 2008-2009, and this is considered optimistic by economists. With prices of iron ore jumping Australia's terms of trade had improved by a leap but now it looks like the terms of trade have peaked. The budget surplus of A$22 will be cut by two thirds by this and also from the A$10.4 stimulus package announced by prime minister Kevin Rudd.

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Krugman points to the economic muddle that China is getting itself into. He says one way of looking at what is happening now with high inflation is that inflation is the market's way of undoing the currency manipulation that China has engaged in. By following aweak currency policy to protect export interests China has created an artificially high trade surplus. But this is now turning into a lose-lose proposition for both China and the US as market forces push wages and prices up, whittling away at any competitive advantage of China's weak currency policy. He says some estimates he has seen show that Chinese undervaluation could be gone in two or three years. Chinese consumers are asked to accept interest on savings limited to 2.75% and below inflation, with the spread designed to help banks earn their way out of bad loans made during the stimulus lending binge of 2009-2010. What is happening is a massive allocation of capital away from consumers to lending for state owned companies that have created overcapacity in many industries, and use part of this capital to engage in real estate speculation. Krugman says China may be on its way to some kind of crisis with collateral damage to the rest of the world as it is a major importer of commodities from Canada, Brazil, Argentina, Australia, and a major importer of high tech goods from Germany and the USA....

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Toyota's changes in its global architecture in 2011-2013. Reorganization to build amore tight knit management structure for better responsiveness and decisionmaking. The focus is on getting rid of bureaucracy after years of growth that led to excessive and sometimes indirect reporting layers. For instance, chief engineers now report directly to top product planning executives to speed decisionmaking and make new product introductions faster. Regional managers are now shrunk to three groups: North America and China; Japan and Europe; Australia, Russia and emerging markets. It is interesting to note that China and the U.S. are put together- the logic is based on the idea that the buyers in each group tend to have similiar buyer behaviour for vehicles, say Toyota managers. Another significant effort focusses on increasing the use of standardized parts to 50% for vehicles that are of similiar size. The Prius C, the redesigned Camry and the Etios subcompact in India, were cited recently by CEO Akio Toyoda as examples of products that have utilized these changes in methods and approach....