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The slowing of China's growth with GDP growth for 2012 estimated by the government at 7.5%. Growth was 8.1% in the first quarter of 2012, with expected decline in the second quarter. In response China's National Development and Reform Commission, which executes economic policy in China, has accelerated the approval of major infrastructure investments starting in April. This includes hydropower stations, clean energy projects, 4 new airports and renovations of 3 large steel plants, a subway in Nanjing. The investments total about $150 billion. Another stimulus comes from investments by local governments with central government support, including highways, sewage treatment plants, and $55 billion investment by state corporations in the Chongqing municipality. To revive the auto industry a cash-for-clunkers program is also planned, and this may include cash incentives for home appliance purchases. In addition to this the State Council headed by premier Wen Biao is making plans for 20 major projects in 7 strategic industries, from advanced equipment manufacturing to energy conservation. The result is a Stimulus that will be much smaller than the $585 Stimulus spending of 2008-2009, with a measured response compared to the earlier splurge in spending. Experts say the Communist party sees this as ensuring a smoother transition to a new president and prime minister in 2012, with added credibility for the nations growth and for the leadership of the Communist party in the modernization drive. ...

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The irony of the Afghan war is that the same pilots and planes that worked for the Soviet supported Afghan government, that the US under President Reagan supplied weapons and antiaircraft missiles to bring down, are now fighting the American war against insurgents. Antonov aircraft for transport and Mi-35 Hind helicopters, and Afghan crews that flew them are part of the airforce that the US is training and building up. The commander of Afghanistan's air corps is a formerMiG-21 pilot. By 2016 the 32 aircraft airforce is expected to grow to 120 aircraft at a total cost of $5 billion.

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Vauban is a "car- free" upscale communitynear Freiburg, Germany, close to the German-Swiss border. Except for the main street where atram to Freiburg runs, and two parking lots outside the community, there is no place to park cars. About 70% of the people there do not have cars and 57% sold their cars to come here. There are no car garages or parking places with each home. Bicycles are hte main means of transport. Vauban hasd 5500 residents in one square mile. The basic concept of having stores placed only awalk away is being followed more and more as America and Europe shifts away from intensive auto based use of space for living. The whole post war location of housing and stores and community activities was based on large use of the automobile. This is now going through big changes. David Goldberg, of Transportation of America says " how much you drive is as important as whether you have ahybrid." A fast growing coalition of hundreds of groups is advancing the cause of building communities with stores only a walk away and less need for the automobile to get around. Outside Hayward, California, Quarry Village is anew development that is trying to reduce autos to one per home. So car based is American culture that most zoning laws require 2 parking spaces per residential unit, and in the federal transportation bill 80% of appropriations in prior years used to go by law to highways and only 20% to other transport. This even though passenger cars are responsible for 12 percent of greenhouse emissions in Europe , and upto 50% in some car-intensive areas of the USA. One solution to the problem is to use smart planning to avoid the suburban sprawl, and shift to smaller more fuel efficient automobiles, and build better mass transit and rapid transit and fast rail linking most towns and cities, that will moderate all the excess that took place after the war. This may be the direction smart planning is taking us, and places like Vauban remaining niche communities for green advocates and a sort of reminder that its possible to go in this direction....

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Only Honda is withstanding the the sales shock as numbers tumble from June of a year earlier. Toyota auto sales down 21%, Ford 28% and Chrysler 36%. GM 18% because of special incentives and discounts. Honda a modest 1.1 % increase in sales. The US manufacturers have their plants skewed towards making trucks and SUV's so turning out Chevy Cobalts and Focus cars is a big problem as there are huge drops in truck and SUV sales and customers are shifting to cars. Sales of Ford SUV's fell 55% and its formerly top selling truck line dropped 38%. Toyota sold about two thirds fewer light trucks than in 2007 June. Market share of domestic makers in the USA market dropped to 46% from 50%. To get some idea of capacity constraints. According to Global Insight GM can build only 250,000 Chevy Cobalts, while Honda has the capacity to build 400,000 Honda Civic small cars annually.

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US president Biden's $2 trillion infrastructure spending plan is being compared to the New Deal infrastructure plans of Franklin Delano Roosevelt in the 1930's. FDR was preceded by Republican administrations under Hoover and other presidents who followed policies that can be compared to the Reagan administration policies when public sector spending was not seen to be as efficient as private sector spending. By the time of the economic collapse in the 1930's it had become clear that only the federal government could save the country in the depression. During the pandemic and collapse of the health systems it was clear that only the federal government could save the country. It is now also evident that infrastructure building led by the government can rebuild America. In the 1930's and during other periods in American history such as the building of the Erie Canal and other public sector infrastructure projects in the 19th century it was the federal government that led the way to building America. ...

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Suzuki is not going to give up its dominant position in the Indian market easily. It has about 25 years of experience in India and owns 54% of Maruti Udyog which makes about 750,000 cars a year and plans to make 1 million cars in India annually by 2010. In JD Powers surveys Suzuki ranks first then Hond and Hyundai and Toyota fourth. Tata Motors is ninth. Competitiion is sure to heat up and Hyundai also has considerable experience being the second foreign company after Suzuki to come into India earlyon. The newcomers from Euope USA and Japan like Toyota and GM don't have anywhere near the experience and distribution netwrks and years of experience of Suzuki and Hyundai. So Suzuki may lose market share but will continue to be one of the top companies in India for some time. This is made possible by Suzuki investments in India. Suzuki plans a one billion yen research center in India to develop cars for the Indian market and is building a new plant in India.In the nextfew years Suzuki plans to double the number of service centers and showrooms to 1000 to reach every part of India. Suzuki is seeing considerable demand for its Swift car and has higher end versions in the Grand Vitara and the SX4. The head of Suzuki, Mr. Suzuki, has run the company since 1977 and is determined to respond to competition from newcomers with moves of his own to keep Suzuki as one of the leaders in India. ...

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Public opinion in France is divided about France's dependence on nuclear power. Ifop's survey of Nov. 13, 2011, shows 40% of the French are now "hesitant" about nuclear power, about 33% favor nuclear power and 17% are against it. About two-thirds of the ruling UMP party of Nicholas Sarkozy supports nuclear power, while half of the Socialist party supporters say they are not sure about the path ahead. The issue is becoming important in the election, as the UMP claims the Socialist party's proposal to shut down 24 of the 58 reactors if elected will cost thousands of jobs and solar power cannot take its place overnight. The French are a bit puzzled by the nuclear issue in contrast to Germany where the issue arouses strong emotions, because nuclear energy had become accepted in France till the Fukushima nuclear disaster raised safety issues. EDF which operates the plants plans to increase spending on safety measures and on maintenance after audits by the French nuclear regulator. EDF's share price was down 40% since the nuclear accident at Fukushima, Japan....

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In his comments at the Congressional Institute DJT says his tariffs plan resulted in China cancelling building the largest automobile plant in the world just across the US border in Mexico to export these cars to the US. That plant was planned for a capacity of 1 million cars a year which would have hit the US auto industry hard. DJT's  tells this story of how his tariffs are making a difference in not letting other countries take advantage of the US and destroy America's industry and communities, and jobs. "In Mexico they are going to build the largest auto plant in the world. It was during my campaign. And a great gentleman who builds auto plants was building this factory and I asked how is it going? I want to take a look at one of your factories you are building. One of the good ones. Are you ready? This was 8 months ago. I said you will have to go to Mexico. What about the US? He said  we are putting up a couple but they are small. In Mexico they are building massive automobile factories. I said you mean they are doing it? Who is the owner. He said mostly China. One in particular is massive. So they are going to build cars and send them to the US, for no tax or little tax, and destroy whats left of Detroit." "Mexico has taken 32% of business over 30 years. The other is Canada. They send us millions of cars. We don't need them for that. I said to hime when is this going to open. A couple of months. It will openin 1.5 years. I said I am not happy about that. And I said in my next speech I'm going to charge them. No cars coming ino the United States from Mexico without a massive tariff. I said it 3 or 4 times and what happened is about 2 months later I saw the same gentleman in the audience and I said I want to see you backstage. I said let me ask you what happened to that plant. Where is it now? He said China has canceled it. Why? Because they think you are going to be elected and charge tariffs on the cars coming in and it doesn't work."  "So Detroit will breathe and we are going to do the opposite. Companies can build plants if they want but they are going to have to build it in the United States."   ...

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With Democrats controlling 51 votes and 11 Republican votes needed in the Senate to reach the 60 votes for passing aid to automakers legislation, the whole issue remains clouded for now. Politicians of both parties made statements but the reality is that there is not enough support in Congress for aid to automakers. And if the $25 billion that has been already approved for retooling plants for higher fuel efficiency is now released for salaries and operations by congressional vote to change this it still has to pass a poosible veto by President Bush. And Republican opposition is hardening as they call for real changes in how these companies are being run and at the same time some Democrats may also support this position.

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UN projections show median age of Chinese citizens will overtake that of Americans in 2020. Yet China's median income is only a quarter of that in the U.S. Life expectancy in China today is 76, very close to that in America. In 1960 a Chinese person born that year had life expectancy of 44 years.  China is aging at the pace of Japan, and a bit slower than South Korea, but wealth per capita was three times higher in South Korea and Japan than China when the aging accelerated. A Chinese woman fertility rate today is 1.6 compared to 4.6 in 1973. A prominent Chinese economist says in a recent report that median age in China in 2050 will be nearly 50 compared to 42 in America and 38 in India. WSJ cites figures showing China will have gone from 9 working age adults per retired person in 2000 to just two by 2050. So how to pay for retirement of all these workers today? Government spending on retirement is a tenth of GDP, about half the level in older wealthier countries, and increase in spending will impact growth. Today this is about 6.2% potential growth rate. It also pushes wages up with a shortage of workers in cities such as Shenzen and X'ian even with the use of new technology and robots in factories.  Solutions are to raise retirement age currently set at 60 years, increasing labor force participation of women as Japan has done, and increasing productivity. China has transferred 10% equity stakes in four state owned financial firms to the national pension fund to shore up its finances as estimates from the Chinese Academy of Social Sciences show it running out of money in 2035. Traditionally children supported families in old age but the one child policy leads to situations where the child is working or in another city. In Suzhou near Shanghai, a retirement business sends 1800 helpers to private homes and 130,000 retired people, in a new trend. The city administration of Shanghai plans 400 neighborhood care centres for elderly by 2022, with health clinics, drop in facilities, and homes. 12,000 elderly people use one centrre in central Shanghai area of Changning. ...

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Macron returns to the Sorbonne, France's oldest University, for his second address to Europe, following th first in 2017, 7 years back. Then as now Macron presents a vision for Europe, with a unique role for France. Defense of the ideas and ideals of Europe built through centuries, in contrast to USA and China, and India, other centers of world civilization. It is worth a try to read the whole speech if you are a European or a friend of Europe, to get a sense of the European ideas that come from France, Italy and the Netherlands and Britain, and Germany. It presents ideas not just about defense, including Ukraine. Most of the speech is about how can Europe and European ideas be made to grow and prosper with all the changes happening in the world in technology, content that is less and less European for the children of Europe- less than 3% Macron says. How it can invest to meet the oversubsidizing that the US and China are doing, the investments that the US with Inflation Reduction Act for $1 trillion in spending and investment including chips and science, and the similar investments in China- how can Europe make investments of $1 trillion, and ways to generate the funding. And investing $1 trillion on a Europe wide basis with a plan and a set of goals to maintain European leadership in a world dominated by the US and China, and soon India. Macron says in 12 months plans have to be developed and set into motion for this new European effort. ...

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As drops in price of steel could lead to imports into the US with paying lower tariff Trump increases tariffs on steel to 50% on May 30, 2025. Nippon Steel says it will increase its investments in US steel mills at US Steel including older mills, $7.7 billion in modernization of plants, and $2.2 billion at Mon Valley plant. Ownership of US Steel based in Pittsburgh with 14,000 workers will stay in American hands. DJT intervened to make these investments possible. Investments will keep furnaces open 10 years and give every worker a $5000 bonus. It is this type of action that has helped DJT win in Pennsylvania and win worker support.

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Its generally known that US airlines except for Southwest fly older planes but the extent to which this has been going on may not be gauged especially when compared to the foreign airlines. Because of bankruptcies and reducing the number of seats available by shrinking their fleets to keep prices at levels that sustain their margins, airlines are not ordering new planes and using the existing planes. The average age of the big jets in US airlines is now 12.2 years according to Airline Monitor. Boeing has a huge backlog of orders for its new planes but its mostly from foreign airlines. Only 43 of 710 Boeing 787 Dreamliners are going to domestic airlines, 25 to Continental and 18 to Northwest. And none of the 165 giant Airbus A380's are going to US carriers. These numbers are amazing because they suggest the new airplanes more comfortable more fuel efficient with more space and better air quality are just bypassing the US domestic routes. Quite amazing. Of the airlines Northwest has 109 of the oldest jetliners in the industry with an average age of 35 years. And worse still they could remain in service for another 5 years as there are no plans to replace them. Airline cleaning is not as frequent as before because of cost cutting and the dirt and grime, the conditions of the lavatory, all show their age and passengers can tell the difference. The seating is cramped and one passenger described a Northwest plane seating as feeling like being in a tuna can. And the airlines in the US are using these planes for longer routes with more chance of mechanical bfailures leading to more flight delays which are a huge problem this year especially into and out of the New York area. American flies a fleet of 300 older MD-80's which actually cost more to operate because they are gas guzzlers compared to the newer planes. Credit Sights estimates that this will continue for another 5 years because airlines are trying to save a cash cushion for leaner times, payoff debt and strengthen their balance sheets, and shareholders want some of the money returned to them. US Airlines had cash of about $28 billion as of June 30, 2007 but this is not enough. J.D. Poer and Associates estimates that US airlines need to spend $280 billion over the next 20 years to replace the aging planes. Meantime discount airlines in Europe are ordering new planes and Asian airlines have big orders. Air Berlin has about 85 737's on order and Wizz Air of Hugary ordered 50 Airbus A320's. ...

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Germany's Economy minister Zypries warned that Germany would take legal action by taking the case to the World Trade Organization if president Trump imposes tariffs above that allowed by WTO rules. She said this before a meeting at the White House between president Trump and Chancellor Merkel. The U.S. is Germany's largest export market with 107 billion in imports and the U.S. exports 58 billion euros of products to the U.S. Zypries accepted that the large trade surplus of Germany was "a problem," but that America "needs our machines and industrial plants" for the time being. Germany has insisted that it does not provide unfair advantages to its companies, and that German companies were simply more competitive. Trump has focussed largely on China for anti-competitive practices, though he mentioned BMW by name during the campaign. In the last 2 years the euro has depreciated significantly against the dollar giving German companies competitive advantage, largely as a result of the ECB- in opposition to German economic policy- trying to stimulate the economy of other southern eurozone countries such as Spain, Italy and France. ...

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President trump accepted the package of spending bills passed in Congress which provide a fourth of the border wall funding he is looking for. The package includes $1.38 billion in funding for 55 mile border fence on the border with Mexico. Mr. Trump sought $5.7 billion for a longer fence to fulfill a key 2016 campaign pledge. Mr. Trump plans to get additional funding by declaring a national emergency that could potentially enable shifting to either military construction or U.S. Army Corps of Engineers funding.

Senator Lindsay Graham supports an emergency declaration. The National Emergencies Act limits presidential power by allowing Congress to terminate an emergency declaration and automatically terminates it in 180 days.

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Russia's national airline, Aeroflot, has goen through a transformation by improving safety and inflight service through a rigorous program of training for pilots and inflight service personnel by 2015. It is 51 percent state owned. Aeroflot has the advantage of the Moscow hub which cuts passenger travel time to distant destinations by 2 hours compared to Dubai hub of Emirates airlines. A flight New York to Shanghai is shorter by 2 hours for Chinese travellers. The Moscow- Rome flight is 80 percent filled by Chinese passengers for example. Passenger volume is up 10.3 percent in the first 9 months of the year, even as air travel in Russia was down 3.4 percent in Russia, according to Aeroflot and transport ministry. One advantage enjoyed by Aeroflot is its very young fleet of planes, with age of 4.3 years on average in 2014, compared to Delta at 17 years and British Airways at 12.6. It has 118 Airbuses and 25 Boeings, and has added 21 locally made Sukhoi Superjets to support the local aircraft maker. ...

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Industrial and Commerical Bank of China (ICBC) plans to make a push to go global with increasing foreign presence. The largest bank in China, ICBC plans to increase the number of countries it has operatons in from 28 to 50 in 2012-2014 period. ICBC chairman Jiang Jianqing says ICBC is well on its way to becoming a global bank.

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Spirit Airlines strategy to charge for almost everything from snacks to bags, reservations on the phone and other items for a flight- making it a bare bones flight like that of European budget carrier Ryanair- has proven very successful. Spirit's net profit per plane is now the highest by far in the U.S. airline industry. Spirit leads with $2.06 million profit per plane, followed by Delta at $1.21, United $1.19, JetBlue $0.51, Southwest $0.32, US Airways $0.21, and American at a negative $2.32 million, according to Ascend and FactSet Research. Spirit has stayed away from business fliers, instead pursuing the frugal flyer, other than the seat everything has a price. Boarding passes cost $5, water $3. Spirit started the trend to charge for bags. Southwest has moved away from the no frills arrangement and Spirit is gutsily moving that way. Carryons in the overhead bin run $30-$45. Compared to other airlines which get only 6% of revenues from add on charges, Spirit gets about 50%. Since 1989 Spirit earned $289 million, compared to $1 billion for way larger Southwest. Bill Franke, a former CEO of America West Airlines in 1990's, bought Spirit with the idea of modeling it on Ryanair in Europe, after Spirit could not turn a profit flying Midwest passengers to Florida. He teamed up with CEO Baldanza to run the operation on a hands on basis with only 1% going for advertising, and Franke doing some of the ads in emails. Running flight on a tight schedule means late flights and with tight seating and strict refund policies, Spirit has many complaints. It has the worst on time performance in the industry. Yet it has planes running close to capacity in today's frugal customer environment. Prices are about 30% lower than competitors according to industry analysts. Franke and Baldanza seem to revel in this, sensing that they have struck the right tone for a frugal flier, and outdone cost pioneer Southwest. ...

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This view from the Editorial Board comes as Republicans in Congress geared up for a legislative victory decided to ignore the expert opinion of the Joint Committee on Taxation and polls showing a majority of Americans disapprove of the tax law. It says a "corrosive partisanship" that is affecting the nation has led to this decision. Not an informed consensus necessary to make real and lasting changes to the tax laws that increase growth without disrupting hard won gains in social cohesion after World War II.  Republicans pushed through a trillion and half dollars in tax cuts in the law that reduces the corporate tax rate to 21% from 35%, and cut taxes in 2019 by 51 times ($51,400) for the top 1% of incomes compared to ($1000) for middle class families earning less than $100,000 (Tax Policy Center). The Joint Committee on Taxation estimates it will add $1 trillion to the U.S. deficit as only $500 billion is expected in increase in government revenues over a decade from additional economic growth. This is supported by evidence from countries such as Britain that implemented this type of corporate tax cut without generating much economic growth, says Greg Ip in the Wall Street Journal. The "victory" then comes at a high cost says the Washington Post- in years to come programs to help the growing lower middle class and working class will be subject to cuts and taxes will have to rise to balance budgets.   ...

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Reports of ATM's running out of cash in India in 8 states. The government says this is a result of a spurt in demand and will ease in a few days. The government's policies are to increase the number of debit card and digital transactions to shift more of the transactions in an underground economy into the formal economy so that tax revenues to fund infrastructure can be generated. As a result fewer currency notes of Rs. 2000 or about $30 are being printed. This is aggravated by black market hoarders of 2000 rupee notes. Public confidence in the banks was shaken by some high profile scandals leading to people keeping extra cash at home increasing the demand. The government plans a bailout of $32 billion for bad loans at banks.

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Even if a automobile part for assembly is manufactured in the U.S., the subparts may be sourced overseas. This makes it extremely difficult to pinpoint the country of manufacture. Toyota Siena is 90% sourced with US and Canadian parts according to the U.S. National Highway and Traffic Safety Administration. The Ford Mustang 2005 by contrast uses 65 %US and Canadian parts according to NHTSA. There is a publicity war between the US makers and the Japanese with commercials arguing about who is more American. According to the Japanese Automobile Manufacturers Association $28 billion is the amount of cumulative investment in N. America and $45 billion is the amount of annual purchases of parts, so that 67% of the Japanese brand cars sold in N. America are made there. A graph from National HighwayTraffic Safety Association shows the Average percentage of auto parts made in the US and Canada for cars sold in N. America. It shows 2 interesting things. 1. That the US makers GM and Ford are closer to 80% and the Japanese makers Toyota and Honda are about 70%. So American makers still have more American content. Note though that Nissan is only around 54 % domestic content, significantly lower. Its always been a much weaker competitor than Toyota, and its sales recently have been sluggish in the US. The Koreans are not shown here but its quite possible that their content is closer to Nissans than to Toyota or lower than Nissans. So all foreign plants may not be the same. Notice the change in Toyota from 52% domestic content to 70% domestic content, from 2000 to 2005,an 18% jump which could only result from a deliberate strategy anticipating the controversy of who is truly American and who isn't. 2. In contrast GM has definitely shifted from 92% to 80% and rapidly moving in the opposite direction than Toyota. The sea change currently underway in the American auto parts industry is in the background, with Delphi looking to increasing manufacture and sourcing overseas particularly Asia (China, India etc), to bring down costs and be competitive in a globalizing auto parts industry. In the future as Delphi shifts overseas and GM procures from China and India one could see a continuing rapid shift to higher overseas content to add the cost savings directly to GM and Ford's bottom line. ...

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Analysts are predicting problems for Honda's plants in China stemming from wage increases. The wages of 500,000 yen per year for a worker in Honda's Chinese plants are double what is paid for a factory worker in India or 33% higher than in Thailand. For the Guangzhou plant to meet domestic demand it would have to have a 50-50 joint venture with a Chinese company, and this would mean getting government approval. For now that plant will remain an export hub. The entire plant -out of 4 Honda has in China- is committed to exporting the Jazz compact to Europe with production of 50,000 vehicles a year. Honda now owns 65% of the plant.

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China's dollar for dollar retaliation on $16 billion of U.S. imports with 25% tariffs set to take effect August 23 excludes oil which was on the original list. China takes in about one fifth of the total U.S. oil exports, and in the space of 2 years has become the largest importer of U.S. oil. Experts say China could be shooting itself in the foot if it decides to place tariffs on oil imports from U.S. China is dependent on foreign sources for 70% of energy needs and this trend continues. Another reason say analysts is that by keeping oil out of this trade dispute there is more chance that China can continue importing Iranian oil through a waiver  after U.S. sanctions on Iran go into effect in November.

The U.S. also exports higher quality oil that is less polluting and a grade which is used in newer plants.

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Egypt plans to tackle the financial crisis after the pandemic and the war in Ukraine by increasing natural gas exports by one third. It has the LNG terminals to do this which are underutilized. The LNG could be exported to Asia or Europe at ten times the price buyers in Egypt pay for it. The way this additional natural gas is to be exported is to impose 15% cut in use of natural gas in Egypt similar to what the European Union has done with its 15% mandated reduction. This will then be diverted to LNG terminals. The max temperature for air conditioning is 25 degrees under the new plan and lights are dimmed or shut off after 11 pm in streets, shops and malls.  The war in Ukraine has doubled the price of wheat and other basic food necessities imported from Ukraine and Russia. This put a heavy burden on state finances in Egypt with subsidies on bread and other food for 70 million people out of 102 million people. Investment needs are also affected. Saudi Arabia has stepped in with help as no IMF program has been set. A 14% devaluation of the currency took place in 2022 and another devaluation of the currency is expected. ...

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Critics say president Macron's appointment of an obscure official, a mayor of a town in the foothills of the Pyrenees (Prades with 6000 people), is a sign that he plans to be both prime minister and president for the remainder of his term. By selecting someone from the right wing Le Republicain party of Mr. Sarkozy, Mr. Macron now hopes to win reelection in 2020 with a shift to the right. His popularity at 35% is way below that of Edouard Philippe the outgoing prime minister who is at 50% of those polled recently.  Mr. Sarkozy and Mr. Macron represent a self focused presidency.