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Krugman cites the near monopoly of rare earth materials by China, and the embargo on export to Japan, as an irresponsible exercize of economic power by China. These materials are used in many high-tech devices.The monopoly itself was a result of the US neglecting its production of these materials in the US. In one case, he says, the US allowed the Chinese to literally pack up all the equpment of a US factory and ship it to China. Low wages and lax environmental standards helped China to price below the U.S. industry, leading to its shutdown.

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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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European companies rushed to make new business investment in Iran after the lifting of Iran sanctions with the Iran Nuclear Deal in 2015. This report in the NYT shows companies in Europe were wary that the nuclear detente with Iran would not last. As a result the European exports to Iran up to $12.8 billion in 2017 were up 30% but still ranked Iran as the 33rd largest trading partner, behind Serbia. Other problems were bureaucratic hurdles and a lack of coordination in Iran for moving ahead with projects. After the deal was signed companies such as Peugeot, Airbus, Total, Daimler moved ahead to invest in Iran. Yet the investments were made carefully considering the opposition of the Trump administration. In one deal Airbus agreed to provide 100 new aircraft for Iran Air's aging fleet, yet only 3 were delivered by May 2018. Daimler had a deal with Iran's Khodro vehicle maker for Fuso brand trucks, yet Daimler officials say demand was weak. A deal made by Total to explore for offshore natural gas may require a waiver under a "grandfather clause" say Total officials, or the option to turn over the investment to its minority partner CNPC, a Chinese state owned company. The U.S. ambassador to Germany, Mr. Grennell, says European companies should stop operations in Iran immediately showing the U.S. plans to take stronger action.  ...

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Even though volatility is high in stock markets, the U.S. stock market has rebounded to levels in August 2019. The level on March 10, 2020 after effects of the coronavirus on the global economy was for the DJIA average in the U.S. to be at the level it was on August 14, 2019, as shown on the graph in the WSJ, in the neighborhood of 25,000. In the last quarter of 2019 there were steep gains in the Dow Jones averages that could not be fully explained, these gains have disappeared. Considering the suddenness of the crisis from the coronavirus in China, and the double whammy of impact on global manufacturing supply chains of first the tariffs on Chinese exports to the U.S., followed by the coronavirus, the impact on stock markets seen in this overall context is comprehensible. Particularly the sharp gains in the last quarter of 2019 which now appear to be muted. There is also some good news for economies such as China and India, which are large oil importing countries, and the rest of Asia, in the sharp drop in oil prices that helps cushion some of its impact on the global economy. For the U.S. this also happens at a time when the economy is in much stronger shape than at any time in the last ten years. ...

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Addressing the UN General Assembly in a virtual setting Mr. Trump tells delegates that China should be held accountable for certain actions in letting the coronavirus pandemic spread. He included the denial by China of human to human transmission very early before Feb-March, and its allowing Chinese flights to go overseas when it had completely banned flights domestically. He said flights were allowed to leave China after the virus spread from Wuhan even after Mr. Trump banned flights from China to the U.S. This spread the virus from China to Europe and to America.  Mr. Trump says the WHO is controlled by China. And this happened after foundations such as the Bill and Melinda Gates foundation and other foundations partly replaced the strong role played by the U.S. government at the world health agency during the post war period maintaining strong U.S. and European oversight in the earlier period. The lack of cooperation by China to let American experts into Wuhan immediately in January played a role in delaying the U.S. getting a first hand look at the coronavirus at the epicentre. Instead a 2-3 week delay left the U.S. Europe and India unprepared for the speed and havoc caused.  The only way to tackle the coronavirus was with speed and that speedy response was doubly needed because Europe and the U.S. had no recent experience with epidemics. Even India and rest of Asia, Latin America, Africa have no experience with this type of transmission and spread making time absolutely critical.  This speed was affected because China and the WHO acted as stumbling blocks in this view of what happened. The result was that in past pandemics were fought together, this pandemic was fought on a country by country basis, a bad precedent. ...

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U.S. Federal Reserve minutes for Sept. 16-17, 2014 released October 8, show the mood shifting away from raising interest rates, as a stronger dollar and weak overseas growth are likely to lower U.S. economic growth, A stronger dollar is likely to keep inflation down. Fed officals showed serious concern about slowing economies of Europe, Japan and China lower U.S. exports. A former Fed adviser Jon Faust, director of the Center for Financial Economics at John Hopkins University, says even with no action from the Fed on interest rates, the stronger dollar makes financial conditions more restrictive, and acts as a tightening. The Fed minutes are before the crisis in Hong Kong which created geopolitical tensions and affects foreign investment climate for China, reducing Chinese growth even further.

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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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Xiaomi, a maker of smartphones in China, traded for about US$2.15 per share on the Hong Kong stock market on July 9, 2018 after its IPO. Xiaomi was valued at US$43 billion, about half of the value that was expected. Reasons given by experts are that Xiaomi is one of a number of smartphone makers in the highly competitive Chinese market. Xiaomi has about half of its sales in India and other countries where it sells low cost smartphones with more value based on features included. Problems that it experienced in Brazil in connecting with national carriers made investors cautious about Xiaomi's market position in other developing countries. Limiting its profitability is its position as a hardware maker in a competitive market, without the profitability of other internet companies. Xiaomi surged in the last decade in China as a local producer of smartphones that provided features of more expensive brands at a lower price. It built a following as a quality local brand in China. ...

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Critics say China's currency is undervalued by 20%. China is only willing to increase the value of the yuan by 3% this year, fearing that a signifcant revaluation will lead to the closure of textile and other factories in the coastal areas that operate on a small profit. Facing high unemployment the US is not willing to let this happen gradually. US businesses that manufacture in the US and export to China would benefit if the yuan appreciates significantly. Retailers such as Wal-Mart and textile producers with offshore manufacturing at contract sites in China are on the other side as they benefit from the lower value of the Chinese currency.

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Current responses to China's different posture in international relations obscure the huge investments made by US and European Union business in China that lead to about $1 trillion in exports from China to US and EU in 2021. This could not happen without the hyper investment in China by business in the US and EU that not only neglected manufacturing technologies in the home country but did this on a immense scale that would end up shipping almost the whole of the manufacturing supply chains to China from the US and EU. Done as a carefully planned shift of some manufacturing operations it could have benefitted both China and the US and EU. In what way was this hyper move in pace and scale damaging? China's water, air and land was contaminated at a rapid pace never before seen in history, seen as early as 2005. And the hyper shift by 2015 and in 2020 is now showing the severe effects of climate change with droughts, floods and fires all over the world. The German Environment Ministry today counts the cost at 90 times in the use of coal and fossil fuels over time. On the scale that this massive and fast shift was done of manufacturing to China even more so- a hugely imprudent response of US and EU business management and executives. Instead of tackling and confronting head on the challenging problems of quality control and cost in the 1990's through 2000 and beyond at home, management at Apple and other companies simply shifted all manufacturing to China. The other ill effect of the imprudent response of American business was in the massive and wholesale shift of supply chain to China by offshoring practically the entire manufacturing base. It was to lead to the massive losses that workers, families  and communities in the US and EU that countries could not cope with as it moved on an accelerated hyper level and pace. The result was to lead to intense criticism of China and a level of rancor that has poisoned the relations with China. Some of this counsel to China was given to leaders of the Communist party who had little knowledge of American capitalism operating within constraints of social democracy in 1990. Some of that counsel was self interested given by investment banks to Chinese officials- investment bankers that have now disappeared from view- who themselves lacked an understanding of the social constraints of American and European democracies. It is that rancor that is now leading to China and the US disconnecting the supply chains leading to questions one is certain within China about how this will affect unemployment in China in the years to come. The pandemic simply accelerated this realization on both sides of this untenable situation. Still a trillion dollars in exports are taking place even as the political situation is now totally adrift -as the situation in Taiwan in August 2022 shows- the political and trading relationships at opposite ends and seemingly at war with each other. ...

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The declining prospects for construction and heavy equipment manufacturers in the Chinese market with the slowdown in growth in China. This affects Caterpillar Inc, Volvo AB and Komatsu Ltd. Between 2008 to 2010 investments in machinery, construction projects and other types of fixed assets went up by 61% to $4.36 trillion. China's domestic manufacturers Sany Heavy Industry Co. and Zoomlion Heavy Industry Science and Technology Co. also expanded during this period. Now analysts see demand in China as having collapsed compared to the earlier period. Monthly sales of hydraulic excavators for July 2012 declined by 23% to 5886 units, and first half sales were down by 38%, according to machinery trade association. China's stimulus spending also contributed to the surge. The new stimulus planned for 2013 is more selective in investments and much smaller because of overcapacity and overbuilding in many sectors. Some investments such as John Deere's new plant under construction in China and two in Brazil also under construction, will move forward at a slower pace and impact margins. Cummins CEO, Linebarger sees the situation continuing throught he second half of 2012 and recovering gradually in 2013. The slowdown is not deterring construction machinery equipment manufacturers. Caterpillar CEO, Doug Oberhelman, sees demand accelerating after the lull and is slowing its plan to double workforce in China to 11,000, and quadruple excavator production by 2015, but not idling assembly plants so that he has inventory on hand for a recovery. Exports of made in China excavators is also an option, and exports increased 115% in July 2012, over the prior year. But this may be based on manufacturers belief that the drop in demand in 2008 and recovery in 2010 will recur, which may only result in higher inventories as the current stimulus is much smaller and selective. The Chinese government plans to follow the DRC/ World Bank Report and is moving away from the large role of state run firms in the economy....

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Discussion in China's inner Communist party leadership circles about the way forward for democratic reforms, including free speech, and monitoring of government policy through criticism. This follows an unusually frank sppech in Shenzen in August, by premier Wen. A number of party elders call for further action in democratic reforms for better governance, and to curb corruption. The sense that China is reaching an impasse, and further development beyond what has been achieved in three decades requires democratic freedoms for the people of China. This has the potential to be a signifcant development, because it comes as economic policies of the past will have a harder time working now because of western resistance to high level of Chinese exports. The search for a new economic model may involve soul searching, and new thought on the political models that are needed now.

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Did a major U.S. chip maker Advance Micro Devices give away advanced computer chip technology in deals that saved the company as it faced a downturn in business. In Jun 2019 the U.S. Commerce Department issued an order that bars several Chinese companies from getting American technology. In the meantime Chinese versions of AMD chips are rolling off production lines in China, according to this report in the WSJ. It shows that AMD's partner in China, a military contractor, already used those chips to build what could be the world's fastest supercomputer. The AMD deals gave China access to state  of the art x86 chips made only by AMD and Intel Corp. Here the WSJ says AMD's CEO in October 2014 Lis Su, faced AMD's financial difficulties when she joined, with lack of cash, large debt, and declining revenues. Some analysts predicting bankruptcy protection. The deal for China's company Sugon to manufacture the x86 chips included $293 million in licensing fees, and $371 million for selling an 85% stake in its two factories in China and Malaysia to China Integrated Circuit Industry Investment Fund Co, a state backed financier. The U.S defense Department tried but failed to get AMD to submit the deals to Cfius, the committee on foreign investment in the U.S. that has people from Treasury, Defense, Commerce, Justice and Energy. The Treasury Department ruled in AMD's favor in the closing months of the Obama administration. Defense Department officials say the deals were structured to sidestep U.S. regulations through two interlinked joint ventures. The first venture focusses on R&D and production controlled by AMD, the second on design and sale controlled by AMD's Chinese partner. The second company venture enables China to show that the resulting product was developed locally in China. In another development Sugon publicly announced that it was using the AMD x86 chip to advance China's chip technology advancement just as it had done for high speed trains. Making indigenous an imported technology, designing it at home, absorbing it, and then innovating to make China a leader. By mid 2017 this information reached General Spalding at the Trump White House. Lawmakers wanted to give Cfius committee new powers. By August 2018 Defense department submitted the Sugon deal for review a second time. After the Defense Department's deputy undersecretary for Research and Engineering criticized the whole deal publicly in front of industry executives, Commerce Department stepped in and on June 21 it asked for the unwinding of the deal with Sugon,  imposing new export restrictions to limit access to U.S. technologies. For AMD the cash infusion from China enabled it to get back from near bankruptcy. China gained x86 technology in its bid to make the fastest supercomputer, the U.S. faced with another loss in technological edge, and AMD shares jumped 80% to $30 per share recently. Brian Spegele, Kate O'Keefe, and Yang Jie in Beijing, covered this story for the Wall Street Journal. ...

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The speed with which GST revenues grow in India will determine the pace of industrial development, infrastructure building, and exports growth in India. It is the main source of government revenues and plays a role similar to what land sales played in China's rapid development over two decades.  States that generate the maximum GST reflect the industrial and commercial activity of the state in the overall context of India's growth. This is why Maharashtra with the commercial capital Mumbai plays an important role with Gujarat and its commercial capital Ahmedabad. Both states formed the industrial core of the country under the British Empire as one state called Bombay state. Maharashtra today makes up 15% of the country's GST revenue with Gujarat coming in close to Karnataka at third. Maharashtra at 2.7 lakh crores for 2022-2023, Gujarat at 1.1 lakh crores and Karnataka at 1.2 lakh crores. Karnataka has the IT capital of India in Bangalore now called Bengaluru. The compound annual growth rate of Maharashtra is 12.3% for the five years to 2022-2023 and for Gujarat 11.8%, Karnataka 11.7%. During the last year Maharashtra GST grew at 24%. National compound annual growth rate for GST tax collections is 11.3%. These states all have state and federal governments aligned for maximum effort in infrastructure and logistics development through allocation of capital, land, human resources, and other inputs. Tamilnadu comes next with 11% growth with the state capital of Madras or Chennai. These were the main commercial centres under the British. Bangalore emerged after independence in 1947 as the center for IT industries. To repeat the kind of development acceleration seen one after another in Japan, South Korea and China, and learning from their experience particularly the climate change and pollution negative aspects of the Chinese experience, India needs the accelerated growth at these rates for GST to finance growth in investments. It also needs to increase the quality of these investments by paying attention to negatives such as pollution and climate change through government regulation of activities that create these negative aspects.  ...

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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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Experts in Germany and the U.S. look at areas adversely affected by free trade and globalization and the increasing support for right wing parties in these areas. David Autor is a labor economist in the U.S. at MIT who has studied these trends. He says trends in free trade have hurt low wage workers. In 2014 he and David Dorn, Gordon Hansen, Jae Song, published a paper showing how trade with China was affecting different parts of the U.S. Lower wage workers, most of them with less education and skills were prone to be unemployed or face lower earnings in areas where cheap imports from China were replacing domestic production. Donald Trump has strong support with the white working class and less educated workers who form this group. He has accused China of "currency manipulation" and proposed a 25% tax on Chinese imports. Experts say there is no strong evidence that immigrants are causing this type of dislocation in the U.S. Yet immigrant bashing is used by Trump and other right wing politicians which is attributed to it being an easy tactic for politicians to appeal to the anxieties of working class voters....

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Alexandra Stevenson provides this insightful glimpse into a highly inflated property market. Microflats in Hong Kong of 275 square feet, smaller than a bedroom, sell for $722,000. Smaller flats of 165 square feet are planned by developers. Since 2003 property prices are up 300% in Hong Kong. Experts see another fall in prices similiar to the one in 2003 during the Asian financial crisis. Mainland Chinese investing in Hong Kong flats have never experienced a collapse in prices. Hong Kong mortgage rates are low, about 2%. Experts see a rise in U.S. interest rates affecting buyers, as Hong Kong interest rates are tied to U.S. interest rates. With low rates on savings accounts, savings are going into an highly inflated unsustainable property market. One estimate shows 41% of household wealth in China is tied up in the property market. A downturn in prices could lead to a large decline in consumer spending. Nicholas Lardy of the Peterson Institute of International Economics sees China not immune to the kind of housing price collapse that hit the U.S., Spain and other countries in the last decade....

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Decline in capital investment in 2016-2017 expected at Lukoil and Rosneft as the Russian government postponed a reduction in taxes on oil exports for 2016. Russia is dependent on oil exports for a third of its national output, and about half of its budget depends on oil revenues, a major weakness, but this is being managed carefully till oil prices recover. Russian officials say the $50 a barrel assumption for oil revenues in 2016 in the budget is optimistic. Yet Russian output decline is expected to be limited to about 3% a year from 5% for Lukoil in future years from decline in investment, because of drilling new wells and use of horizontal drilling technology on older fields. In 2015 oil output increased modestly to 10.73 barrels a day from 10.58 barrels a day in 2014. Russia's oil industry benefits from a tax system that favors the industry. The export duty on oil and the mineral extraction tax are based on price. A declining ruble which has gone from 35 to the dollar before its invasion of Ukraine in 2014 to 86 to the dollar in Jan 2016, has a favorable impact. This actually helps the industry because workers and oil equipment suppliers in Russia are paid in rubles, and oil revenues are earned in dollars. As a result new technologies such as horizontal drilling now make up one third of oil supplies from 11% in 2010. Chinese suppliers also provide new technology drilling equipment, as China is not part of the sanctions. Gazprom Neft's CEO Dyukov says it can make a profit at oil price of $15 a barrel. Because of the tax system after tax revenues are stable at the oil companies in Russia, even as government tax revenue declines. All this points to resilience in the short run for the Russian oil industry. The decline in the value of the ruble is seen as an opportunity to shift away from an overdependence on imports during the period of high oil prices. Alexei Kudrin, former Russsian finance minister, sees growth returning for the Russian economy in 2017. This may actually be good news for the struggling economies of U.S., Europe, India, China, and other countries which would be boosted by low oil prices sustained over a longer period- something made possible by competition between big oil producing countries Russia, Saudi Arabia, Iraq and Iran, and the profitability of oil production at prices below $30 to $20 a barrel....

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Some economists expect growth in China's GDP to slow down to 5.8% for the 4th quarter. China's export driven growth model based on factories with plentiful hardworking young labor including young women, and plentiful foreign investment, Chinese investment from HongKong and Taiwan, and plentiful capital generated from China's high savings rate, and supply of land from local government officials eager to participate in the boom, is finally slowing down, after 3 decades since Deng launched China on this path. However this slowdown is happening drastically, and the whole model is coming apart. The first signs came earlier this year as the government initated a shift in policies after seeing the costs of runaway growth on the environment and in pollution of air and water, and in the wages of labor. Laws protecting labor rights and wages, and stricter pollution laws and enforcement for the first time in years that suggested the government was serious, pulled the bottom off of marginal export industries and companies. Only the larger better run companies were able to operate in this environment. About 67,000 factories closed in coastal regions in the first half of this year. See the link to this. Now that process is hit by the global credit crisis and the demand decline in 2008, and possible demand collapse in 2009 in US export markets if some things like the auto industry take a bad turn and unemployment jumps, all are hitting hard at China's export sector. This is in turn hitting investment as in Germany as companies pull back, and nervous consumers with losses in the stock market and seeing a decline in housing prices pull back on purchases resulting in inventories building up for different industries including the important auto industry. ...

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The rising production of natural gas in the U.S. from shale deposits has hurt the use of thermal coal. Appalachian coal costs $65 per ton to produce and prices have dropped to $52 a ton on the spot market, making it unprofitable to produce. Coal mining companies were relying on the demand for metallurgical coal from China's steel industry, which has boomed since 2004, to continue profitable mining operations. From $40 a ton in 2004 the price of metallurgical coal climbed to $330 in 2011. In 2009 U.S. met coal exports went up to six times the prior year's production and this continued in 2010, leading to rapid expansion. Now with a slowdown in China and the Chinese steel industry operating at a loss with huge overcapacity, the prices of met coal are down to $170 a ton. Patriot Coal of St. Louis filed for bankruptcy protection and many companies are shutting down mines and laying off workers.

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Metro Detroit has 90% of the 17,000 cases in Michigan as the pandemic reaches its peak there this week.  The large Detroit airport renovated and enlarged is seen as a source of the coronavirus as Detroit is where all 3 auto U.S. auto companies are located. GM, and Ford have large manufacturing operations in China, and  Chrysler has plants in northern Italy, the locations where coronavirus has hit hard, and in the case of China where it originated. Health experts say the busy Detroit international airport connecting the Detroit hub to other auto hubs in northern Italy and China- both virus hotspots- may have contributed to the virus hitting Detroit early. This country to country transmission along some route is how the virus has traveled to over 150 countries. For instance German reports show Bavaria as the source of the early cases in Italy's Lombardy region. It could be that German auto companies located in Bavaria with large operations in China resulted in inadvertent transmission of the virus from China through airport in Munich from flights between Germany and China. A Shenyang municipal bureau report provides information on German  investment in Shenyang, Liaoning province. Munich based BMW makes 1.3 million cars here. There is also the newly built Chinese German Tiexi industrial park in Shenyang with 50 German companies BASF, Siemens, located there.  Once the virus arrives in one location its spread depends on the environment with densely packed areas and the health conditions prevailing in a particular area playing their part. Both in New York and Detroit metro area this helped its faster spread in lower income densely packed areas.   ...

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The Economist magazine points out that even without the one-child policy birth rates would have declined in China because of rising participation of women in the work force, education, delayed marraige, and the high cost of education and housing for more children. As China pursues a two child policy starting in 2015, many of the same factors are at work and many women are seen as unlikely to have two children. The Economist says the right policy would have been to scrap this policy altogether. This may actually happen as China sees the social and economic factors behind the falling birthrate continuing to operate limiting the size of families, and creating problems of rapidly aging society as in Japan. Latin America provides strong evidence to support the Economist magazine's point because of the falling birthrates in Brazil and Mexico for social and economic reasons.

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Bridgewater Associates estimate of the cost of the TARP (Troubled Assets Rescue Program) that Treasury is initiating and should have the legislation in place this week, "could reach $2 trillion". Other problems on the horizon. Psychologically a collapse of additional investment banks like Goldman or Morgan Stanley or of smaller midsize banks could rattle nerves over the next few months. Manhattan College finance professor Charles Geisst says "I don't think Goldman and Morgan Stanley could survive too many rounds of this." And BW says it sees a world without Goldman and Stanley as quite conceivable. Where are problems shifting to in the horizon for 2009? The socalled Alt A loans pose a real problem as default rates there approach 15% and it involves larger loan numbers than subprime, and the default rate is rising on prime mortgages with higher unemployment and weaker economic conditions. So the next area of serious danger to the economy will be the difficult economic conditions from tight credit, declines in consumption spending, declining production and higher unemployment, and defaults on corporate loans. These declines affect Chinese exports and would affect China's ability to take in higher US exports of capital goods and advanced machinery as China's growth rate slows even down to as low as 5% in a global slowdown of consumption and international trade. This is where the attention will turn to as we get into 2009. And riding out the storm will mean riding out these economic conditions after and alongside TARP....

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Research by Matthew Slaughter of Dartmouth shows that only 4% of all American firms and 15% of American manufacturers export. Overall 80% of America's trade is conducted by just 1% of the firms that export or import. Exports as a share of GDP are 10.9% in 2009, much lower than other exporting countries. These numbers will increase as America focusses on exports to rebalance the economy.

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The Dow Jones Average stock index drops by 800 points on August 14, 2019 with the ratcheting up of tensions in Hong Kong over autonomy protests, and the ongoing trade U.S. China trade dispute with more tariffs in September. Weak economic data from Europe exacerbated the situation.