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Artificial intelligence in schools in China keeps track of how much attention students are paying to class teaching. AI lets students and teachers know when students are not paying attention at short intervals. This is useful say teachers but also worrisome for parents, says this video report in the WSJ.

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The severe flooding in Henan, China's largest province, are shown in pictures and videos in this Guardian report. This report shows residents were not alerted by local authorities and were caught by surprise in the flooding. A similar situation happened in western Germany.

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This report in The Times take a look at the work Liz Truss has done as International Trade Secretary and now Foreign Secretary. Truss does not want Britain to become economically dependent on China. More than Johnson Truss is a UK Atlanticist who wants the UK to work with the US and the EU to build a western world that is entirely independent of China. Looking at her work and experience it would appear that Truss is the most underestimated of the candidates for prime minister, much more so than Sunak. She can be strident and aggressive but she has gone through a process of thinking and studying before that with a willingness to try new ideas. She come from an intellectual  family and one that was active in left wing activism. She studied at a comprehensive school in Leeds before going to Merton College Oxford  to study philosophy, economics and politics, and was willing to change her thinking when persuaded about a different course of action to get better results. She also gained the knowledge she needs to do her own thinking with experience first hand as Chief Secretary at Treasury, Secretary of International Trade, and as Foreign Secretary, getting trade deals with Australia and negotiating with other countries. Cameron, May, Johnson lacked this kind of knowledge and experience. And Sunak also falls way short of this kind of knowledge acquired and experience handling international assignments key to Britain's advancement after Brexit. ...

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A new security law for Hong Kong is passed at the end of a weeklong session of the National People's Congress. This gives China's agencies powers to police activities in Hong Kong and removes Hong Kong's autonomous status established by a treaty with Britain that arranged the handover in 1997. 2878 lawmakers voted with one dissent. China says it is intended to control separatism, terrorism and foreign interference in Hong Kong. It bypasses Hong Kong governing authorites and the effect is that it removes the "one country, two systems" basis of the handover by the British.  This sets the stage for the U.S. to remove Hong Kong special status in trading relations. The U.S. is joined by Canada, Australia and Britain in expression of "deep concern," and Japan has also said it is "seriously concerned" and "will address the situation in an appropriate manner." Under the U.S. Hong Kong Policy Act of 1992 the U.S. treated Hong Kong as autonomous for trade and economic matters. Mr. Pompeo, the Secretary of State for U.S. says this status will no longer continue. As supply chains are being reassessed during the coronavirus, the end of autonomous status for Hong Kong would mean the beginning of a new period in changing economic relations across Asia and the Pacific. ...

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Indonesia continues to experience surging growth in consumer spending as more people enter the middle class and buy everything from motorbikes, consumer appliances, mobile phones and other products. It is similiar to the growth in China and India. GDP increased by 6.5%in 2011, and most of the growth comes from consumer spending. Mr. Riady of the Lippo Group says spending is growing to unprecedented levels. About 50 million people in Indonesia are in the middle class out of a population of 250 million- when measured at the level of $3000 per year incomes- and this will grow to 150 million by 2014, according to PT Nomura Indonesia. Another important demographic fact is that the average age of the population is 28.2. Motorcycle sales doubled to 8 million in 2011, twice that of 2006. Mr. Riady of the Lippos Group says its home sales are expected increase to $450 million in 2012, up from $100 million in 2010. Sales at Lippo Groups hypermarkets are expected to go up by 40% in 2012 and sales at its department stores increase by 25%. Lippo Group plans to add 10 new hospitals each year, to the 14 it plans for yearend 2012. Philips Electronics NV says healthcare equipment sales in Indonesia will quadruple in by 2015. This pace exceeds that in India and China for Phillips Healtcare....

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The supply chain chaos that is not good for American or European companies is shown here and how it is good only for warehouses that store these products for long periods. In March just 7% of the sea shipments from Asia to North America arrived on time, for Europe this was just 6%. This WSJ report says even big companies can expect to pay 5 times the freight rate than in 2019. New trouble looms in the form of more lockdowns in China with its zero covid policy and wage negotiations with dockworkers in Los Angeles and Long Beach. Stockpiling is one way to ensure availability which means additional costs. Vacancy rates for logistics property are at 4% in the US and 3.5% in Europe. All this points to the need for reshoring and bringing manufacturing back home. Companies need to invest $1 trillion over 5 years to relocate all foreign manufacturing based in China that is for markets in US, Europe and other parts of the world. As companies make plans for the shift to bring manufacturing back home, half the money going into real estate is still going to logistics properties and industrial logistics in the meantime, says this WSJ report ...

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A Hyundai shipyard can build a military ship for $600 million that would cost the US about three times that number -$1.6 billion. South Korea can control costs with its marine shipyard capacity to build 40 ships a year in shorter time frame by 20 months. Note that the US had 17 shipyards in 1970, by 2020 it had dropped to 5 ships. Why is this a problem? China has this type of advantage in cost and expertise so that it would be even with the US current capacity by 2030.  Naval power made it possible for first Britain and then the US to provide the structure for the Modern World based on science and technology to grow and improve living standards. Unlike in the colonial era the US has helped raise living standards in China, India, South Korea, Indonesia, all parts of the world.  An administration that has focus and concentration in its leadership and is based on a concept of the Modern World based on science and technology is best suited for the task of renewing America for its role for the next generation of Americans. ...

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Christie's London based head of wine, David Elswood, says what he has seen in the last year from Chinese buyers is people paying virtually any price for wine. He calls this uncontrolled spending. Value of wine auctions reached $120 million in 2010, double the $64 million in 2009. Auction houses Sotheby's and Christie's say their auctions of wine in Hong Kong will raise more than sales in London and New York combined. Sales broke auction records at an Oct 29 auction, when three bottles of Chateau Lafite's 1869 vintage each sold for a record $230,000. The number of billionaires in China jumped by 60% in 2010 and this is inflating the bubble in wine. Chinese collectors now hold one in 4 bottles of vintage wine globally, according to Crown Wine Cellars. This company stores HK$1 billion of wine in a network of converted ammunition bunkers in Hong Kong.

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VW is rolling back decades of globalization, with shorter supply chains, less focus on China, more investment in the US. The war in Ukraine has further disrupted already strained supply chains and VW is rethinking its entire manufacturing system in a new way.

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The bottom line is that China is so advanced in the deindustrialization of the US with US companies cooperating that the only way to get American companies to change course is by creating precisely this kind of situation where China responds with its about 100% tariff to the US 100% tariff. That sends a clear message to American companies and changes the culture of America's deindustrialization American companies are wedded to. Treasury secretary Scott Bessent said DJT raising the tariffs from 34% on April 2 , 2025, Liberation Day by 50% to reach 104%  as a well thought out US tariffs policy was Trump’s “strategy all along.”  Bessent  said: “This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded.” China responded to the 34% DJT tariff by going with it's own 34%. When this retaliatory move suggested China was not willing to consider US arguments that it only wanted a level playing field from China with it's complex system of non-tariff barriers against US imports, DJT added another 50% tariff saying that if China did not withdraw its retaliatory tariff on April 8, US would go with another 50% tariff on April 9. This is what Scott Bessent means by US having put China in a position where it would have to put its own 50% tariff on US products to get to US tariffs at 104% vs. China's at 84%.  The bottom line is that China is so advanced in the deindustrialization of the US with US companies cooperating that the only way to get American companies to change course is by creating precisely this kind of situation where China responds with its about 100% tariff to the US 100% tariff. That sends a clear message to American companies and changes the culture of Aamerica's deindustrialization American companies are wedded to. ...

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How the surveillance state tries to solve the problems of modern living, keeping cities clean and livable, is shown here for the city of Hangzhou in China. With growth slowing Chinese society is evolving in a different direction with the government trying to solve the problems of modern living such as traffic congestion, food safety, missing children, and sanitation, using AI and sensor technology, and not promising a ever growing economy.

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The US has 1 trillion in trade deficits each year and it is completing the destruction of manufacturing in the US. Half of this is with China as China exports through Vietnam and Mexico, third countries, in addition to 295 billion dollars of trade imbalance the US has with China. China, Mexico, Canada and Vietnam are the largest offenders. No country can long endure with such a loss of its manufacturing base. The US Navy itself is in danger without the manufacturing to compete with China in shipbuilding. China has taken up over 50% of shipbuilding, and soon the US Navy will not be able to protect the free world if these types of economists and self serving German or other foreign interests drive a false narrative and the US acts on such false narratives.  Without the US Navy in the Pacific, Atlantic and Indian Oceans no one is safe, not Germany, not the EU, not India, not Latin America or the rest of Asia and the world.

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China trade pause deadline of Aug 12 and its renewal. US negotiators Bessent and Greer in Stockholm report back to DJT for a final decision on whether to extend the trade truce with China by 3 months. China wants to remove the duty related to fentanyl entering the US from origins of the chemicals in China of 20% imposed by DJT, yet trade negotiators say no significant improvements on cracking down on the chemicals used to make fentanyl are seen. Currently duties are at 50-55% and would go up to 80% without a truce. The UK, Japan and European Union, Indonesia, Vietnam have come up with trade agreements with the US by July 28, 2025.

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A brief history of Xinjiang which translates as New Frontier in Chinese. Its the western frontier of China and a vast area that comprises the desert region of the Tarim basin. It has 13 sizeable ethnic minority groups and borders eight countries. Because of the lack of irrigation technologies these arid expanses were settled very late in history, says Victor Mair, a Professor of Chinese language and literature at the University of Pennsylvania. Even the Uighurs were tribes from the Mongolian steppes who settled Xinjiang in the 10th century. For China it was mostly aplace for havin border military garrisons. Around the 10th century and the Tang dynasty in China, trade on the Silk Road- with places like Kashgar oasis towns on the fringes of the desert as hubs- was at its height. It was not until 1760 under the Quing dynasty of ethnic Manchus, that this area was annexed by CHina and serious effort made to settle it with demobilized troops. A civil and military administration encouraged immigration, say scholars Millward and Perdue in a 2004 book of essays by 16 scholars, "Xinjiang: China's Muslim Borderland." About 50,000 demobilized troops were offered benefits, seeds and land if they stayed. A similiar situation seems to have been repeated after Mao annexed Xinjiang in 1949. In the early 1950's the Chinese government established the Xinjiang Province Production and COnstruction Corps, which was setup to manage large farms and construction projects called bingtuan and provide jobs for demobilized troops. The bingtuan are profitable enterprises and an estimated one of every six people in Xinjiang are employed in bingtuan, or 1.3 million people. THe HAn who were 6% of the population in 1949, now comprise 40% of the 20 million population of Xinjiang. Another source of employment is in the oil and gas industry, with the Communist party secretary of Xinjiang for the last 15 years being aprotege of President Hu Jintao, from his days in the Communist Youth League, coming from the oil industry province of of Shandong. These jobs are mostly all reserved for Chinese which causes resentment among the local Uighurs. Wong quotes a Uighur university student as saying, who is the foreigner here and whose culture, language and way of life should be protected. This may be the crux of the grievances of the Uighurs, as their use of the language and religious practice is restricted, and they feel they are second class citizens in their own land. Other articles in the NYT and Economist go to point out that the links with international terrrism are not a source of the problem, and the unrest among the Uighurs is more about a feeling of loss of culture, language, religion and identity, and jobs. And the idea that the best way to work with minorities, or regions with different language, religion and culture, just as the British did in South Asia and India is doing now is through tolerance. See the links to NYT and Michael Wines on 7/11/2009 about the Communist party secretary for Xinjiang, Wang Lequang, whose policies in Xinjiang and now in Tibet through a protege, may be worsening this situation. ...

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Global update on the pandemic April 7, 2020. The U.S. has 368,000 confirmed infections, and over 10,000 deaths, as of April 6, based on John Hopkins University data.

Japanese prime minister Shinzo Abe issued an order for a month long state of emergency covering Tokyo, Osaka and five other prefectures.

Philippine president Duterte extended the quarantine for Luzon island to April 30.

The lockdown was placed on Wuhan, China, epicenter of the pandemic on January 23. On March 25 about 2 months later some travel restrictions were lifted. On April 6 trains were allowed to leave for several cities in China. 

Countries in Europe that stepped in early with restrictions such as Denmark and Czech Republic moved to ease them a bit. Czech Republic and Austria will require people to wear masks outside.

 

 

 

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A recent Deutsche Bank study points to the pro-cyclical nature of oil prices in this decade where oil price increases do not lead to decreased worldwide consumption. The IEA forecast is for 1.64 million barrels of oil a day in increased coonsumption in 2013 compared to 2011, which hides a drop in consumption of 640,000 barrels a day in OECD countries. That is offset by higher demand in China, the Middle East and Russia. Middle East consumption is about 80% of consumption in China, and oil price increases lead to higher growth in these countries and Russia leading to increased oil consumption reinforcing a pro-cyclical cycle. What is not clearly understood is how this changes with weaker economic growth. Additional factor to consider is future increasing growth of oil consumption in India, Pakistan, Bangladesh, Indonesia, Vietnam and other developing countries that offset reductions in Chinese consumption as China's growth rate slows.

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Gold reaches $983 a troy ounce, nearing its all time high of $1003 of March 2008. Russia, China, Venezuela and other countries which have large dollar reserves are building up their gold holdings to reduce the risk of holding masssive dollar reserves which are going down in value. Investors are also buying up gold as a global liquidity cycle is taking hold, with the liquidity pumped in by the Federal Reserve to fight the credit freeze.

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The survival of the failed Kim regime has cost millions of lives for the people of North Korea. Yet the international politics of the countries has focussed on other issues: the South Koreans wanted to avoid the burden of taking on the people of North Korea as West Germans did for the East Germans after the collapse of the Berlin Wall, China wanted to avoid a reunified pro-western neighbor to the south and the potential influx of refugees across the border, Japan and the U.S. were focussed on the nuclear threat from N. Korea. The result is a failed state and an uncertain future for the people of North Korea.

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How China is reviving memories of its struggles with Japan since 1900 and its efforts to modernize since 1950 under the leadership of the Communist Party led by Mao and Chou-en-Lai. Who were followed by 1990-2010 by a technocratic class of engineers and professionals, and now reverts back under XI Jinping -a son of one of the founders of the revolutionary armies that fought the Japanese- reverts back to its revolutionary ideologies that defined its emergence as a modern nation. Only American business interests fail to understand the China of president Xi Jinping because they like Tim Cook have not read or understood the modern history of China. In the book "Stilwell and the American Experience in China" by Tuchman, a lot of this can be experienced first hand as we see West point colonel Joe Stilwell experience China first hand since 1920's through the phase of nationalist sentiments, outright Japanese invasion, and the setbacks as North China and the Yangste Valley fall to Japan's Kwantung Army elements who run the government by 1939. Then comes the Second World War, Marshall is appointed chief of the Army by FDR in 1939 and he makes Stilwell brigadier general and responsible for China for the next 8 years. This is a China Stilwell loved and understood from daily contacts with the ordinary people of China that are on every page of this book. Jinping's father grew up in this way leading the revolutionary armies that fought the Japanese, and some of this passed on to his son even though he suffered from the Great Proleterian Cultural Revolution of the 1960's, but understood the significance of what his parent's generation had accomplished in creating modern China free of centuries of unimaginable poverty, indifference of the ruling classes, and oppression made worse by foreign powers. ...

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Public perceptions in the USA of China are changing. Today 42% have unfavorable views of China vs. 39% tha have favorable views of China from survey results released in August by the Pew Research Center. This is a change from 2007 when 42% polled had a positive view of China and 39% a negative view. Things that have changed since then are the Tibet riots and China's strong reaction, the issues of contaminated Chinese products entering the USA market and the nationalism in China on the eve of the Olympics. The last touches McCain and his senior advisor on China, Michael Green of Georgetown University, who finds the Chinese reaction on issues like trade to be cocky but cocky to the point of being arrogant. His comment "the combination of arrogance and insecurity can be dangerous." Green was on the National Security Council under President George W. Bush. McCain and Green want to bolster trade relations with other Asian countries like India to help the USA strengthen its bargaining power with China. McCain wants to strictly enforce trade agreements with China including blocking unsafe products from China. The shift in opinion in the USA at a time when there is a shift in opinion in China to a nationalistic tone sensitive to criticism of China even when it concerns issues like Tibet which do not affect any vital interests of China should be seen as significant. This is happening at the same time as a candidate like McCain who has less tolerance for Russia and a similar position for China is running strongly for President and has the experience and support of most Americans on foreign policy issues. Its useful also to see that the figures given here show 60% of Russians seeing China in a favorable light and only 30% in an unfavorable light. And when you look at France and Germany, 72% in France and 68% in Germany see China in an unfavorable light, only 28 and 26% respectively having a favorable opinion. Britain is an exception because 47% of the British public has a favorable opinion of China, only 36% having an unfavorable view. The figures are from Pew Research Center polls of 4,257 adults in he five countries conducted in March and April (international views)....

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France has reacted faster to the economic crisis presented by the pandemic. It shielded its economy earlier with government support and household consumption has held up better. Its presidential system led to faster decisions than Germany's decentralized mode leading to some experts saying it should borrow this aspect from France. France also has 70% of its energy from nuclear, Germany by contrast depended too long on Russia and Merkel's decision to completely get out of nuclear and to let overconcentration of supplies of energy from Russia happen was a mistake. Merkel also supported the auto industry without anticipating changes taking place after the Copenhagen Climate conference in 2009 and preparing for the future. The auto industry has taken a hit in Germany as it relies too much on imported EV batteries from China and was slow to make the transition to EV's and hybrids. In fairness to the SPD's Scholz and Greens Habeck considering the economy handed to them by Merkel they had to scramble after the Russian war in Ukraine in the middle of the pandemic. Germany made it through in record 1 year's time to be independent of Russian oil and gas, a huge achievement. Over time Germany will recover as it makes a transition of business away from overconcentration in China, another of Merkel's and German business failures to develop a vision for the future. China's slowdown has affected Germany. Germany has to invest in other parts of the world including in India and Japan to diversify the supply chain. Overall score card would give Habeck and Scholz a lot better score, Merkel and German business leaders of the time a low score, and Frnce and Germany about the same score. France for a steady response, and Germany for the speed in which the oil and gas crisis handled considering also that both countries have a centralized and decentralized system based on their respective history and culture. ...

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Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

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Either China or India was going to at some point develop the Brahmaputra river known as Tsangpo in Tibet where it starts for hydroenergy. It turns out that the modernization of China preceding India's by 20 years and the occupation of Tibet in 1950 has put China in the position of developing this river with a huge dam. The Brahmaputra in Arunachal Pradesh and Assam states of India is the same river that is called Tsangpo in Tibet when since 1000 China had little physical contact with the region greatly remote from Chinese cities such as Beijing and Shanghai. The Brahmaputra in its Tsangpo stretch of the river in Tibetan region originates at lake Mansarovar and Mount Kailas and on a map can be seen as very close to Guwahati, Assam and distant thousands of miles from Beijing. The dam will include 5 hydropower stations, produce 300 billion kilowatt hours and cost $170 billion. Two decades of rapid growth in China supported by the US with technology and capital have given China the capital needed for this type of scale of investment in renewable hydro energy. It will produce as much energy as the UK used in 2024. ...

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Indian prime minister Modi shown in a meeting together with Biden of the US, Fumio Kishida of Japan and Albanese of Australia at the Izumi Gallery in Tokyo during the announcement of the joint efforts for launching and promoting the Indo-Pacific Economic Framework for Prosperity. The IPEF led by the US will have four pillars of trade and supply chain resiliency, clean energy and climate change action, taxes to promote investment in infrastructure, and good governance. Seven of 10 members of ASEAN have joined including Indonesia. India is a key partner of US and Japan for the new IPEF economic alliance. Prime Minister Modi of India says about IPEF- "India will work together with its IPEF partners to build an inclusive and flexible Indo-Pacific Economic Framework. I believe that resilient supply chains must be based on three pillar foundation of trust, transparency and timeliness, and I am sure that this framework will make these pillars strong and lead to prosperity, peace and prosperity in the Indo-Pacific region." Attracting large investments in India and other reliable partners in a new supply chain that shifts out of China are part of the Biden plan working together with Japan and South Korea. Investments directly into the US are also part of the same plan. Gina Raimondo US Commerce Minister says- "I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for US businesses." US National Security Advisor Jake Sullivan says the IPEF is intended to boost US manufacturing. By boosting US manufacturing and technological advancement with investments inside the US that directly benefit American workers and families the IPEF will serve the US and the free world in ways that will shape the coming decades to 2030 and 2040. With investments in the US will come investments in India as a reliable manufacturing partner to replace China by 2030 is envisioned by Jake Sullivan and president Biden. ...

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Wang Xiaohong, head of public security joins a team led by vice premier He Lifeng, for China's talks with Treasury head Scott Bessent, and Jamieson Greer USTR. The talks are held in Switzerland and include fentanyl as a top topic. The US has called its tariffs fentanyl tariffs on China for lack of the necessary action to stop flow of fentanyl from China to the US. Progress will depend on action on this issue and discussion of other trade issues that cause the lack of a level playing field for the US in trade with China.