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After all the media talk about tariffs inflation- inflation is at 2.4% in May 2025. Tariffs was part of the toolbox of strategies under Lighthizer and Jamieson on getting fair world trade, and not like Congressman Hawley in the 1920's who understood little about the workings of the US economy. This fact the official media such as the WSJ and NYT, Wash Post, BBC need to get it right about the Hawley Tariffs. Hawley was born in rural Oregon in 1864 went to country schools, and was president of Willamette University in Salem, when it's population was 4258. As House Ways and Means Committee chairman he wrote the failed tariffs bill Hoover signed in 1930. DJT's US Trade Representative Lighthizer in 2016 led the successful negotiations with Japan under Reagan, Scott Bessent who leads negotiations on tariffs with China with USTR Jamieson, has a deep understanding and grasp of today's financial markets. Tariffs is one of the tools in the US toolbox to get Japan, China, South Korea to even the playing field for US companies and bring back manufacturing to the US. Without it China would not budge from its unfair advantage and would not negotiate in fairness. This is proven in the way Japan in the 1980s and China today are responding to the US position preparing their economies for not relying on sudden surges in exports putting whole industries and workers in America and Europe out of work and out of jobs. DJT says- "No we are not going to accept that," the EU is catching on and adopting a similar position, China knows that.  The media is irresponsible in presenting tariffs in a negative way, irresponsible to American workers the 10 million put out of work since 2000, and to American families and the Nation.   ...

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The Sri Lankan economy, jobs and growth are affected by economic relations with India, loans and assistance from India, and from investment from India in the 2025 period. USAID plays very little part in jobs and growth. This is true of other countries.  In the past the USAID was seen as part of the activity of the State Department overseas yet kept separate so that aid would not be based on US diplomatic activity. Over time it became a place which supported what critics call bureaucrats pet projects in developing countries. Many developing nations have advanced in their development and no longer need USAID projects, this includes India, Indonesia, China, Vietnam, Brazil, Chile, and parts of Africa. Because development aid was at one time critical as in the period when John Kennedy came to office in the Cold War with the Soviet Union, many nations in Asia and Africa were just becoming independent there was a sense from that time that its acitvity and budget was somehow both independent of the State Department and sacrosanct. As a result it became a target of critics and did not advance the US interests overseas as the US Information Service, the VOA Voice Of America and other agencies have done. A country's development no longer depended on USAID. Why does it need to be separate when it should advance US goals and interests around the world which are benevolent- consider that it is the US that helped build up the Chinese economy and still provides it with a large market. ...

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The French view of the DJT administration is that it is a rupture, an "historic rupture with immigration repression, aggressive trade policy, and undermining of federal and state institutions." This is far from the reality. In fact it is not a rupture, and far from that policy that DJT brought in the waning days of a tired cautious Obama administration that extended the war in Afghanistan long after it was clearly a failure from the Bush years. DJT called it common sense during his Inauguration speech waving his hands- so obvious, stay out of wars we have no purpose pursuing. Regain America's manufacturing base shipped out to China in the Clinton-Bush-Obama years 2000-2016 that helped the rise of China in phases of supply chain partner, competitor, adversary. French view Le Monde is that this is "aggressive trade policy," when in fact small towns across the US and France, and other industrialized EU nations, by losing their factory and industrial base to China have gone downhill losing jobs and standard of living. Tariffs and DJT policy was continued by Biden- there is no rupture. What French in Le Monde call "Immigration repression," is a policy of protecting border security including illegal drug and fentanyl flows and gang activity that was accepted by Biden and Biden-Republican Lankford legislation was agreed in 2024 to close the Border. There is no rupture from Biden on closing the Border.  With millions having crossed the Border illegally Republicans now have the support of Democratic Senators Gallego of Arizona and Fetterman of Pennsylvania in passing the Laken Riley Act in Congress to protect Americans and safeguard life in America.   ...

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An intimate biographical account of new Chinese leader Xi Jinping and his connections with Muscatine Iowa, where he visited as a head of a Chinese farm delegation in 1985. Xi Jinping remembers the trip vivdly and plans to spend time with friends from that visit during a visit to the U.S. in 2012. He spent two nights during that visit in the bedroom of two college age boys of the Dvorchak family. This revealing account of Jinping's life shows that the actual story of his life is quite different from the title of "princelings" or privileged sons of former communist leaders that is suggested by this reference in the media. Because of the volatile nature of Chinese politics, his father Xi Zhongxun, who led communist partisans in the struggle of the pre World War II years, was rehabilitated twice after falling out of favor. The first period was in 1962 and it was not till 1979 when he was fully rehabilitated. During this period which coincides with the growing up period of Xi from 9-26 years of age, Xi experienced many hardships. During the years of the Cultural revoultion Xi was sent at age 15 to Shanxi province where his father had led partisans. He lived there for 7 years in a traditional cave dwelling in the village of Liangjahe doing farm work. He was denied admission to Tsinghua University twice before being accepted in 1974. There he graduated with a degree in organic chemistry. This was followed by three years working as an assistant to Geng Biao, defense minister and a partisan who was a colleague of his father. The next job was deputy Communist party chief of Zhengding county in Hebei province. Iowa Governor Branstad visited Hebei in 1984, and Branstad played host to a animal-feed delegation led by Jinping in 1985- the visit to Muscatine was part of this trip and which Jinping has told others he enjoyed more than his visits to Oregon or California that year. The second time Xinping's father went out of favor was after his criticism of the crackdown of protests at Tienanmen Square. These experiences have given Xinping a confidence and experience in different situations that other Chinese leaders including the current leaders lacked. If Jinping has inherited some characteristics from his father he may also have the courage to take China in a new direction, and make the kind of changes China needs as it shifts away from an export based economy. At the same time rule in China is by consensus of leaders on the communist party's standing committee. His father helped initiate the special economic zone in Guangdong province in 1978, and Xi Xinping held senior posts in the provinces of Fujian and Zhejiang and in Shanghai, giving him close ties with industry and local government in areas that led the export based economy. Prime Minister Lee Kuan Yew of Singapore puts Jinping in the" class of Nelson Mandela type leaders, who has great emotional stability to not let his personal misfortunes and sufferings cloud his personal judgement." Of political positions Jinping has a certain wariness. He once responded to mention of him as the potential leader with the words: "Are you trying to give me a fright."...

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A new solar module factory in Freiberg, near Dresden, Germany, with the latest technology, requiring workers to only supervise the manufacturing process, is shown in this report in DW.com. It is cheaper to make higher performance solar panels that produce 20% more electricity in Germany than to import from China. This could be a global trend in automated supply chains. This is a technological shift says the CEO because more efficient production technology requires less resources and fewer steps in the manufacturing process. Key components such as solar cells are also made nearby in Leipzig in eastern Germany, 90 miles away.    This report shows the interesting changes that are underway. In 2018 the factory building in Freiberg now being used for solar modules was left empty after German manufacturer solar company Solarworld lost a price war with Chinese competitors. Today this solar company Meyer Burger brings new jobs and excitement to Freiberg and the region. By 2026 plans are for it to make 5 GW of modules annually in Germany. Meyer Burger made the heterojunction SmartWire technology machines that made solar modules. In 2020 it decided to make solar modules instead of selling its equipment to others, using its own proprietary technology. Thinking has changed. CEO Erfurt says it is complete nonsense to transport solar modules halfway across the world from China, they should be made where the products are used as it is energy infrastructure. Transport costs 10% of cost, and new technology is constantly being developed and costs decreasing with technology advances. He adds that this is how energy sovereignty can be achieved. In 2021 the demand is expected at 209 GW worldwide. Erfurt expects it to be 500 GW in 2025. Large demand that will now be met locally in the regions themselves- in Spain, in Germany, and in India.   ...

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The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

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The U.S. and China sign Phase 1 of the trade agreement in a sign of reduction of trade tensions between the two countries. Difficult issues of state subsidies under China's state enterprise model of development, and technological competition were put off for the future. China made the deal possible by agreeing to double its purchases of agricultural products, and offering to purchase about $200 billion in American goods and services over the next two years. This gives relief to farmers, a key part of Mr.Trump's support base. This also helps achieve a key Trump and U.S. goal of cutting the U.S. trade deficit with China quickly, just as happened decades ago with Japan.  See the related article and link on how for the first time in decades China's trade surplus with the U.S. is now set on a path for permanent decline. It dropped significantly in 2019 by 12.5% even though China's imports from the U.S. dropped by 21%, based on Chinese customs data released for 2019. With China increasing these imports significantly and the U.S. holding on to tariffs of 25% on $250 billon of China's exports to the U.S. which are outside the Phase 1 agreement, the downward course is set for the next few years for correction of a dangerous trade imbalance. That imbalance was allowed to develop over successive Republican and Democratic administrations. China already has the European Union as its first leading trading partner and south east Asia as its second. China plans to not be so closely intertwined with the U.S. in trade, and yet preserve its state sponsored development model and drive to compete in technology. China's increased purchases from the U.S. of $200 billon are broken down in terms of farm products- $32 billion, manufactured goods- $80 billion, energy products- $50 billion, services $35 billion. In effect the U.S. gets its goal of cutting the unsustainable China trade surplus quickly and with certainty in 3-5 years. China uses the period to transition for less trade linkage with the U.S. yet preserving its state sponsored model of development and drive for technological advancement.   ...

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Vietnam devalued its currency by 8.5% on Feb 11, 2011. A series of devaluations have reduced the value of Vietnam's currency by 20%. The devaluation will lead to higher cost for imported products, especially refined oil products, thus fueling inflation that is already high in developing countries. The Communist party central committee is not giving inflation fighting a priority, and instead is focussed on keeping high growth rates. The party's inflation target is 7% annually, same as 2010 for 2011, when the inflation is already estimated to be about 11% for 2010. Barclay's now expects inflation to reach 13.5% by March and exceed 15% by June. Part of the hesitation to raise interest rates and slow inflation as is happening in China and other developing countries, is the need to create new jobs for a young and increasing workforce. Vietnam's inefficient state enterprises, poor management at some enterprises, and state subsidized lending, have created problems which are putting downward pressure on the currency. State owned shipbuilder Vinashin approached bankruptcy recently with $4.4 billion in debts and poor management decisions. Another significant reason for the devaluation is the seriously precarious situation of Vietnam's foreign exchange reserves. State media have reported that Vietnam's international reserves have fallen to "more than $10 billion" at the end of 2010, compared to $16 billon for 2009 and $26 billion for 2008. This suggests a deeper crisis from years of loose monetary policy and lending to state enterprises to create China type growth rates. Vietnam still a less developed country and not equipped to handle this kind of growth, say analysts....

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The Brazilian economy is growing too fast, and this pace not only won't be sustained, but it has signs of serious trouble ahead. The Brazilian economy grew at an estimated annualized pace of 10% in the last 6 months and generated 962,000 jobs between Jan-April of 2010. Growth in 2010 is expected to be 7%. The jump in growth is partly the result of the stimulus measures of the Lula government. But a consensus of experts is that Brazil still saves too little, has not invested enough in infrastructure,and its economy has the potential of 5% sustainable growth each year. The central bank has increased interest rates - increase of 0.75% in April 2010, and economists in Brazil think the rate will go up to 13% in 2011. About $10 billion in cuts in spending have been announced but they are cuts to an already growing budget approved by Congress, so in reality it will only slow the increase in spending. Public debt is at 42.7% of GDP. Real interest rates have fallen from close to 20% in 2003 to between 5-10%. Costs per unit of labor are increasing at about half the rate of real wages according to a finance official. The National Development Bank or BNDES played a role in helping the economy with subsidized loans when the financial markets ran into trouble. It has expanded lending by 50%, with money from the Treasury of 180 billion reais. Some of the measures of the Lula government has reduced the skewed income distribution Brazil, and in doing so has increased consumer demand. Meeting high consumer demand, and meeting the need for commodities like soyabeans and metals from China, has boosted growth in Brazil to twice the sustainable rate and it is now at a par with China and India. But this places Brazil too dependent on the boom in Chinese demand, especially as the stimulus in China slows and the property bubble threatens China's economy. See links to China. A new President after the upcoming Presidential election will have to tackle the high interest rates in 2011, lower commodity prices, and the need for better infrastructure, and make the adjustment to a sustainable pace of growth....

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DJT plans for 25% tariff on all imported cars goes into effect April 2, 2025. It is intended to promote additional investment in the US auto industry, boosting jobs and wages in the US. These countries have now wrapped their behavior around national sentiment even though they very well know how the US has looked out for Europe, and especially China throughout cataclysmic events in the 20th century and the 21st century such as foreign occupation and failures in modernization. By 2015 the US which had given Europe the Marshall Plan and helped Japan rebuild from the ashes of World War II, South Korea rebuild from the devastation of the Korean war, and China rebuild after the failed industrialization experiments of the 1960's and 1970's, was now facing nations that only saw this as a One Way Street, making the US look stupid and showing a degree of irresponsible behaviour on fentanyl, drug and migrant trafficking  by Canada Mexico and China that has few parallels in history. The narrative from the US is that the US allowed Europe, Japan and South Korea, and Mexico as a manufacturing base for these countries 25 years since the 1970's when Japanese Toyota vehicles made inroads into the US market to help these countries recover, a post Marshall Plan benefit given to Europe and Asia. During 1995-2015 a series of weak administrations Clinton-Bush-Obama allowed the US manufacturing base to decline under a falsely premised globalization that served US financial interests but hurt US manufacturing towns and communities across the country.  This means BMW, VW cars imported from Germany, Subaru, Toyota, Nissan, Honda cars from Japan, Hyundai and Kia cars from South Korea, Chinese EV vehicles, and cars made in Mexico for Asian and European makers, all will face this tariff. ...

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The concerns over far right parties expelling immigrants in states such as Thuringia has caused a wave of protests across Germany including Berlin and other cities in January 2024. It is also impacting the East where anti immigrant sentiment is based. Germany has a shortage of workers in parts of Germany that formed the Federal Republic before reunification- immigrants fill these gaps. The East has not been the success story it was supposed to be because reunification of the Federal Republic and the GDR (Communist East Germany around Leipzig and East Berlin) led to a flight of young people to the western parts for jobs and opportunities. Leading to a mostly older and retired population in the east -leaving it struggling and feeling unwanted. This is the background of the anti immigrant sentiment in the east where there are far fewer immigrants than in the western and central regions. Resentment about being ignored as settled around the immigrant issue in the east even as Germany has benefitted through some of the middle class educated immigrants from Turkey and from Ukraine, and Syria. Similar resentment has taken place in parts of England in the north which led to fear of immigrants being used by Tories party leading to Brexit. In a similar way in France in the north, and in the US with neglect of rural areas and factory communities in the east and midwest. The communities that were left out that have made choices with far right as in Britain have ended up with leaders from immigrant families that have accomplished little or much in the reverse direction for the English people in the north. The leaders of Germany, Britain, the US, the Nordic countries such as Denmark, and gradually in France have learned that it is right to go back to their roots, that they had forgotten where they came from and are now fighting for the dignity of workers (Schulz), standing in picket lines for the autoworkers (Biden), and following the Biden example in the UK (Starmer). With it comes the realization that this started with the Thatcher and Reagan era that created the conditions and culture that were repeatedly embraced by Democrats in the US, Labor in Britain and Social Democrats in Germany alike leading to financial crises and levels of inequality and lack of educational opportunity not seen since the Great Depression. With it by 2024 comes the unwinding of the economics and culture of the Reagan era. Even in China and India the shift is away from that culture as the economies of these countries with half of humanity are shifted to serve a broad base and to include rural, agricultural and other parts of the population. It shows that the educated parts of the population in these countries have the ability to create the conditions that in Lincoln's words are for the people, by the people, of the people, for a brighter future, if only they will try hard enough for their children's and grand children's sake.  ...

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Comments on X that cause difficulty for DJT chief of staff Susie Wiles to keep a clear narrative and the loss in the Wisconsin SC election are leading to a sense that Elon Musk could be a political liability. DJT focus is on the midterms and keeping the majority in the House, which is also why Elise Stefanik was asked to not accept the job of UN Representative and remain in the US Congress. The immediate focus is on tackling the Tariffs Liberation Day action April 2, 2025 so that followup negotiations with about 50 countries including major ones with Japan, Taiwan, Israel, Britain followed by European Union, South Korea and other nations. This would reassure markets as country after country is developing a new trade relationship that respects US manufacturing goals. China could then be tackled as a special case with America limited to loss of $146 billion in energy and grain sales which would be diverted to Europe's energy needs and farmers could be given a $50-100 billion support package. China would then have to find a way to preserve its $1 trillion surplus without the American market  which would require it to find other markets, and create a domestic market, if it chose not to negotiate and accept American manufacturing goals. ...

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At the end of the 2012 Communist Party Congress in Beijing, Xi Jinping assumes the post of chief of the Communist Party of China. He also assumes the post of head of the Central Military Commission, which makes him head of the armed forces of China. Li Keqiang, the incoming prime minister, is the only member of the party Politburo Standing Committee selected by current president Hu Jintao. Jinping is supported by Jiang Zemin, former president. Four of the other five members are older party leaders placed in these positions by former president Jiang Zemin, who succeeded Deng Xiaoping and started China's three decade long modernization. The seven member Standing Committee governs China by consensus. This will limit the room for change, especially as the other five members are in their mid 60-s and favor the status quo. Xi Jinping is 59, Li Keqiang is 57. Xi becomes president in the spring of 2013, and Li becomes prime minister to run the government ministries. The optimism for Li who is the best educated of China's leaders, holding a doctorate in economics from Peking University, and an early interest in constitutional law, is restrained by the institutional arrrangements that favor the status quo. Some experts in China see the new leaders likely to make major changes only if confronted by a crisis. In his live television acceptance speech Xi focussed on China's "rejuvenation," with improvements in the party bureaucracy, tackling corruption, and improving the lives of ordinary people, for better schooling, jobs, incomes, health care, better housing conditions, social security and the environment. From the rush to modernize and build infrastructure attention is now shifting to creating better conditions for the Chinese people....

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Yaroslav Trofimov gives his reflections on what the war means for Russia in this Essay in WSJ, and the sense within Russia that the war itself was a mistake. A result of miscalculations and a result that leaves Russia in no way better than it was in 2021 before the conflict. Hard won economic gains achieved by Mr. Putin during the last two decades have in fact been compromised by the conflict. No discussion has even been done on the transition away from fossil fuels that have been accelerated by the conflict. This is particularly relevant for Russia where the question of redundant fossil fuel assets during the rapid transition to renewable energy is a problem that needs to be tackled. The Ukraine diversion in this way affects the Russian economy and acts as a distraction from important economic goals. Global public opinion is also affected in ways that do not look favorable for Russia the longer the war goes on particularly the effect on food insecurity in poor countries, and energy security in Europe for poor households, the senseless destruction of infrastructure in Ukraine and millions of women and children displaced, all creating a sense of overwhelming moral failure. Mr. Modi of India is reported by FR24 to have told Mr. Putin at a meeting on September 15 that "this is no time for war." This is shown on today's pages in Lyrarc. How could it be a time for war when the pandemic has taken lives of over 1 million people in the US, over 2 million in Europe, millions in Asia, Latin America and Africa, and the world is only now coming out of it. The competition is not between countries for major power status but between countries on achieving better lives for its people, stronger economies, and better job, health, infrastructure and services to ordinary people, tackling problems on a common basis such as climate change. In most situations even the advanced countries of North America and Europe are facing the same problems faced by middle income countries such as China,Russia, and developing countries such as India- how to combine market economy with State participation in the economy and government ensuring fairness to all, better distribution of incomes and wealth, ensuring that there is a level playing field for all and opportunities for all. ...

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Much of what is written here about Xi Jinping pursuing Chinese socialist vision was known since he became president in 2013 when China's Communist party was losing its appeal, and efforts were made to seize power within the communist party by a leader in the western province of Chongqing. Bo Xi Lai attempted to take advantage of the situation with appeals to the working class and without any genuine commitment beyond a power grab. It was well known that Xi Jinping is a son of one of the veterans of the Communist party under Mao, Xi Zhongxun, unlike leaders who followed premier Deng Xiaoping such as Jiang Zemin. Zemin was a relatively unknown figure who was in university during the crucial period of 1947-49 when Mao came to power in mainland China. It would not be correct to say that little was known about Xi's own ideas about socialism as the long term answer to China's problems. Xi also came in as president at a time when the Communist party was losing its appeal to working class people after three administrations that followed premier Den Xiaoping. These three administrations followed a form of state capitalism that allowed companies to pollute the environment, compete without any regulations, and allowed to operate without any controls as long as they pursued growth aggressively and expanded the economy.There was an effort by Communist party regional leader in western Chinese province of Chongqing, Bo Xi Lai, to use this as an opportunity to grab power in China. During his first year as president Xi had to resolve this issue by having a court trial after revelations of corruption and misuse of power by Bo Xi Lai.  Xi's father Zhongxun's role in the revolutionary movement offers clues to Xi's own convictions and faith in the party. Zhongxun was a communist soldier who set up the revolutionary base areas in Shanxi-Gansu northwest border region of China that provided a refuge for Mao's army following the Long March. Other clues come from Zhongxun's role as head of propaganda during the period after 1944 and in 1952. Xi's family background particularly on his mother's side shows a fervent commitment to Chinese socialist vision during the chaotic years when the Japanese invaded China and Chiang Kai-Shek's nationalist forces failed to defend China's sovereignty. One reason Xi has been less understood is that little attention is paid to Xi's mother, Qi Xin who was highly educated and fervently believed in Chinese socialism and nationalist spirit during the Japanese invasion in 1938. In fact Qi Xin had to leave middle school after the Japanese took over Beijing. She joined the Counter Japanese Political and Military University to continue education and in 1941 attended the Central Party school. She met Xi's father Zhongxun in 1944. In 1953 she enrolled in the Marx School of Communism, and it was her position at the school that offered her husband added protection during the Cultural Revolution that affected Deng Xiaoping and others. With such a history in the 1930's, 1940's, and 1950's it is likely that Xi was profoundly influenced by his father's role in the revolutionary movement, and his mother's faith in socialism with national spirit as the way to protect against the foreign invasions. It would now appear that by the time Xi joined the Politburo in 2003 there was no question about the future course China would take given the role of his parents, and the events of 1938 the fall of Beijing, his mother having to flee, and the events that followed. Xi showed resilience during the period of the Great Proletarian Revolution when he was sent to the villages at a time when he would be studying in school and college. He was sent to an agricultural commune in largely rural Shanxi province where he worked as a manual laborer alongside other people and developed a relationship with the local farmers. Unlike other leaders during that period which could even be said about premier Deng Xiaoping in 1989, Xi took a different lesson from this experience largely because his father and mother were committed to the socialist vision for the long run. His father was still not fully rehabilitated by premier Chou en-lai when Xi was allowed to enter Beijing's Tsinghua University in 1975. He studied chemical engineering at Tsinghua graduating in 1979. Upon graduation he worked as a assistant for 3 years to a vice premier who was minister of defense. He then left Beijing for Hebei province to work as a deputy secretary of the provincial CCP. He was made Mayor of Xiamen, then governor of Fujian province in 1999 where he tackled environmental conservation before moving to Zheziang province. His father passed away in 2002 and it would appear that he was carefully trained in different provinces instead of staying in Beijing, for a position of national leadership. Xi got his break in 2007 when the upper leadership of Shanghai city was tainted in a wide ranging pension fund scheme. He was made party secretary for Shanghai. This was the position Jiang Zemin had held before he succeeded premier Deng Xiaoping. In only a few months in October 2007 Xi was made one of the 8 Politburo members, ready to succeed Hu Jintao as president. Xi's perception of being sent to the villages and making it to university education was that it was part of the long run socialist struggle, with pain that his father had also endured as simply a phase in which things would be right in the end. Xi's mother comes across as a resilient figure and one who had herself gone through the struggles of the 1930's and aided her husband on one occasion. Some of this resilience could have been passed on to the son. Xi's wife is a zealous participant in Chinese dance and music performances that created enthusiasm for the Chinese socialist revolution from the 1930's period. In his conversations  with colleagues in the party, in culture and temperament, Xi has been forthright about this background and his style of work.  Xi is unlike premier Deng and the presidents who succeeded him such as Hu Jintao mentored by a former mayor of Shanghai Jiang Zemin who came to power in 1989. Xi is more in line with the leaders around Mao like his father in his outlook and thinking, with a cautious temperament that comes from years going through ups and downs of political struggles. He is once said to have responded with dismay about being in a top position in the government knowing how precarious this had been for his father. The education at Tsinghua, his engineering background, and his easy familiarity with farmers in the provinces, mean that he understands China and its history well enough to have the confidence to shape Chinese policies in a way that none of his predecessors had except Mao, premier Chou-en-lai, Liu Shao Chi and a few veterans from that time in the 1930's. That Xi waited patiently for so long to gradually assert his ideas about socialist vision for China may be the surprising part of his behaviour till 2021.  It may be that he wanted to make the changes only after he could persuade party leaders and colleagues of his vision and long run goals. And because the Chinese economy had grown so large that it would take time to steer the ship in a different direction for the long term. In most of the negotiations with president Trump he cautiously let trade negotiators handle the situation, all the time learning about how to tackle problems of China's relationship with US and Europe. US president Biden also has a vision that is veering towards a socialist perspective in terms of bringing gains of progress to workers and families. So does Mr. Trump, Mr. Boris Johnson in UK, and Social Democrat's Scholz in Germany. It is both economic and political as Mr. Xi is quoted as saying in this WSJ report. The necessities of such action are both economic, social and politically driven as capitalism has veered way off course.  In this report it is mentioned that Soho China 40% stake was taken by a large capital markets firm in New York in the hope of large gains, as Soho China developer was a tycoon who wanted to leave China. Seeing it as not favorable to his company following events in Hong Kong. This behaviour of capital markets groups in New York and tech companies in Silicon Valley, driven by profits and not aware of the social and economic problems of working class American families is a problem in the US and in Europe. It is also what has driven so many large tech companies to expand manufacturing operations in China, that hurt US manufacturing capabilities and American workers jobs- an issue raised by president Trump and taken up by president Biden. Biden has already moved to make Intel Corporation change its plans and invest in American manufacturing technologies in a quietly implemented U turn. US president Biden is left with the unenviable job of solving this huge problem during the pandemic. He has also committed to a somewhat socialistic vision with a $3.5 trillion plan for workers and families, as has vice chancellor Scholz in Germany with his own version of programs, after the failures of unregulated forms of capitalism. Scholz goes so far as to say his mission is to show that there is really no such thing as a self-made man, that it is help from society, his fellow citizens, and government, that makes it possible for him to do his work. In a sense the world is shifting away from Reagan forms of capitalism without regulation after seeing disastrous results during the pandemic. Not just China. Some form of government guidance and regulations are now seen as essential in China, the US, UK, Germany and India for a better society and a better, healthier life, and for opportunity for all in each country.   ...

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Internet penetration in India is increasing rapidly. India had 71 million internet users in 2009 by one estimate. Current estimates are of 80-100 million internet users. India's internet penetration as percentage of population of 5% is low compared to China which is at 28.9%, Brazil at 39.2%, and Mexico at 28.3%, according to figures from the International Telecommunication Union. Analysts expect the launch of third generation broadband networks will help increase internet use in India. One study done by investment bank Caris & Co. shows internet use growing to 180-200 million users by 2015. Most of the major internet sites are in news, job-search or match-making. Internet retail is just beginning to grow with online purchases of $1.4 billion in 2010 going up to $5 billion in 2012.

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 U.S. Trade Representative Robert Lighthizer, views China's response in trade negotiations as one of conducting extended negotiations that lead to little change. This has continued says Lighthizer for over a decade putting the U.S. at a serious disadvantage in trade. At a White House meeting in August 2017 Lighthizer convinced president Trump that China was in his words "tap, tap, tapping us along."  This confirmed president Trump's own instincts about the U.S. trading relationship with China. Lighthizer is a veteran of trade negotiations, having experience in the Reagan administration as the Deputy Trade Representative in 1983 in negotiations with Japan, when Japan was in a similar situation that China is today. At the time trade negotiations with Japan were getting nowhere. Lighthizer is said to have turned one Japanese response in negotiations into a paper plane and sent it flying right back. Lighthizer does not seek the limelight but is serious about his role having published op-eds in the NYT and WSJ since 2000 about how U.S. trading relationships were putting the U.S. and U.S. workers at an unfair advantage. Many of these op-eds are in the Lyrarc archive and a Search with the term "Lighthizer" would bring up these articles. This report in NYT shows how the role of Lighthizer was not anticipated by China when it sent Liu He to Washington in November 2017 to negotiate with the U.S. President Trump made certain Liu He and other Chinese leaders would have to talk to Lighthizer first. In a session with president Jinping laid out U.S. views that the past negotiations had accomplished little and new negotiations had to be undertaken very differently from negotiations in the past. Earlier in July trade negotiations conducted by Commerce Secretary Wilbur Ross were "shut down" by president Trump because China continued to repackage earleir offers which meant little to the U.S. As a lawyer at Skadden, Arps, Slate, Meagher LLP Lighhizer represented steel industry clients hurt by subsidized Chinese steel industry imports. Mr. Trump and Lighhizer have bonded well because their instincts have been the same- that the U.S. had not been well represented in earlier negotiations by lawyers who saw themselves as speaking for American exporters.  Lighthizer is also a seasoned trade negotiator and has waited for the right time and situation to tackle the unbalanced trading relationship with China. For 30 years Lighhizer represented American manufacturers as he practiced trade law at the Skadden law firm. His strategy has been to get the administration to unite behind a clear trade strategy. He says "I try to be friendly in trade negotiations. I am not the theatrical type. The art of persuasion is about knowing where the leverage is." At this time the leverage lies in the huge trade surplus of about $300 billion China has with the U.S. The U.S. goal is to bring this down by $100 billion through this new negotiating strategy as earlier negotiations have failed. ...

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This report in The South China Morning Post in Hong Kong, gives insights into the Chinese position in trade war with the U.S.  China has its own internal groups which support China being able to take a leadership role in world affairs. Xi Jinping made giving China a prominent role in the world a feature of his presidency. China  has this internal audience and its own sense that China's resurgence was won with hard work and cooperation, plus dedication of the Chinese people. In the past Japan and South Korea also used state subsidized industries, and subsidies to gain leadership in key business sectors involving high technology. China would see this state subsidies model as its own model of development. From this standpoint the U.S. demands on subsidies as unfair competition could be seen as changing a key part of its economic model.  Asking China to put everything in writing and show tangible proof of enforcement as the U.S. insisted in talks, was too much for the Chinese side. China said trust us to do this, and lift the tariffs based on our verbal assurances. The U.S. having seen decades of no progress on this point, wanted tangible proof before tariffs were lifted. Added to the demands on subsidies were the demands for no more of what the U.S. calls stealing of U.S. technology through forced transfer of technology by U.S. firms as a condition to operate in Chinese markets. With the U.S. lagging in 5G technology and Huawei ahead the issue resonates on the U.S. side. Add to this Mr. Trump's key voter base includes the former Democratic party supporting workers who have shifted to him because of trade agreements and policies of Clinton and Obama that hurt American workers through seemingly endless closure of manufacturing plants from Chinese competition.   ...

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Krugman cites Apple as the largest company in the U.S. in terms of its valuation but having only 43,000 employees in the U.S. He asks the question- why does Apple get most of its manufacturing done in China? Apple indirectly employs about 700,000 people at its suppliers, with most of them in China. Companies contribute to a country's economy by creating successful clusters of research, innovation and manufacturing. In Apple's case, to the great detriment of the U.S. economy, the manufacturing part is being done entirely overseas. If cost is the only factor for this, then the question remains how German manufacturing has managed to surivive and grow with wages that are higher than in the U.S.

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David Segal takes a detailed look inside Apple's retail stores in the U.S. and talks with employees at different stores to find out what its like working as an hourly employee at an Apple store. World wide Apple's 327 global stores sold $16 billion in Apple products. Per employee the sales are about $473,000, but at an hourly rate of about $12 the average employee makes about $25,000 per year. After recent wage raises this could be up to about $36,000. The National Retail Federation says electronics stores have about an average of $206,000 in sales per employee. Contrary to what most people may think most of Apple's employees are not engineers and other professionals, about 30,000 of the 43,000 Apple employees in the U.S. work as hourly employees in the retail stores. Most are young people in the early 20's, single, with health insurance provided by Apple not costing as much for that age group. There is no career path and most leave after a couple of years. Because of the Apple mystique and the drive to create new user friendly products there are many young people looking for this kind of temporary work, especially now with high unemployment. ...

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Krueger and Posner, eminent economists, say the reason wages have stagnated in the U.S. with wages not having budged much over a decade 2008-2018, is not only because of globalization and automation as long term trends. They attribute this stagnation in wages to "monopsony power," or power American corporations have over workers because of their stronger bargaining position and because workers have few alternatives.  For most of this period 2008-2018 high unemployment as reflected by the people out of work and taking part time jobs or having stopped looking for work, shifted bargaining power to companies. The Economist magazine pointed out that workers have not shared in the profit and gains corporations made during this period. Here Krueger and Posner show additional factors such as non compete clauses in worker agreements that have depressed wages. Half of franchise agreements prohibit competition for labor. Outsourcing work to other companies that hire workers means these outsourcing companies have more power over workers than the original companies using the labor. Unions represent only 7 percent of private sector workers by 2017, compared to 35 percent in the 1950's, so that there are no mechanisms to counteract the greater bargaining power gained by companies vs. workers. The way workers have roots in the communities they live and the consolidation of employers into a few companies in a particular area, mean fewer options exist for workers.  Senators Warren and Booker and the anti-trust division of the U.S. Justice Department are in agreement on this issue of widespread use of noncompete agreements that is considered unlawful, says this report in the NYT, offering hope for a solution to bring a better balance between the rights of workers to fair wages and companies seeking profit for stakeholders. Issues about workers, lack of gains for workers, prevalent outsourcing, and the frustrations of labor with parties that had lost touch with their worker base- such as Labor in Britain, SPD in Germany, Socialist Party in France and the Democratic Party in the U.S. - have led to political upsets with support shifting to other parties. This has not led to significant change to improve bargaining power of workers to correct the imbalance that now exists between labor and companies, leading to calls for change. Eric Posner is a law professor at the University of Chicago law school and co-author of a new book "Radical Markets: uprooting Capitalism and Democracy for a Just Society." This book turns the popular notion on its head that free markets have produced the imbalances that hurt social cohesion and democracy, by saying it is precisely the suppression of free competition such as for labor that have created this unhealthy situation. This is true in other areas where monopoly power has developed in other parts of the U.S and European economies in 2008-2018, as also for distortions in capital allocation that hurt infrastructure and other public investment. Krueger is a professor of public affairs at Princeton University and former head of the President's Council of Economic Advisors in 2011 under Obama, showing that Democrats themselves failed to correct this imbalance leading to a shift to other parties and Mr. Trump, who also appear to lack ideas or solutions to this problem that affects social cohesion and democracy. This is contrary to the vision of American or European society of better opportunity for all shared by all Americans and Europeans for most of the twentieth century. ...

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P&G's plans for additional 4000 job cuts after the 1600 already planned for the 2012 fiscal year. This move and other actions including changes to its advertising budget are expected to generate cost savings of $10 billion by 2016. The nonmanufacturing workforce will be reduced by 10% by 2013 for annual savings of $800 millon by fiscal year 2014. $1 billion in savings comes from moving to digital and other forms of advertising. $6 billion in savings would be generated from less costly packaging materials and supply chain efficiency improvements. By using concentrated forms of detergent products less packaging will be needed. Anaysts say P&G's cost structure compares poorly with competitors- with 31.5% of revenue going to selling, general and administrative expenses, compared to 28.1% for household product companies. At the same time as these cuts are made, P&G plans to add 20 new plants in Brazil, China, S. Africa and Poland.

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Even though U.S. president Trump has singled out countries such as Mexico, South Korea and China for trade practices, the U.S. today faces stronger competition in trade from Germany. The trade surplus with Germany for 2016 was $297 billion for Germany compared to $245 billion for China, according to Ifo economic institute. China's trade surplus according to the World Bank was down from 10% of gross domestic product or GDP in 2007 to 3% in 2016, while Germany's has gone up to 8.5%. The Chinese currency is seen as not being undervalued by some experts, while the euro has lost a quarter of its value in the last 3 years, giving Geman exporters an edge. The U.S. also competes with Germany in nine of the 10 export categories such as machinery and electronic equipment, according to the Peterson Institute. Then why is the focus under U.S. president Trump not including Germany? One reason is that China's products have put a downward pressure on U.S. manufacturing wages, and the the speed with the Chinese manufacturing has grown in certain industries. Germany has very few of the manufacturing subsidies that China provides to its industries. And the depreciation in the euro is not favored by the German government as it opposes the policies of the European Central Bank. Germany also has a higher propensity to save about 10% of GDP compared to about 3% for the U.S., according to OECD. As a result Germany is accumulating foreign assets at a faster rate than any other nation, while the U.S. is borrowing capital from overseas. Ways to change this are minimum wage regulations introduced by the government, but larger measures such as increasing government investment in the economy are not supported as the country prepares for the future with an aging population.   ...