Years of hyper growth followed by slight or shrinking growth in China

07/31/2022

For years China pushed hyper growth without correctly understanding the sources of that hyper growth and its consequences in the long run. Communities in the US and the EU simply could not cope with the hyper shift of factories from local regions to China that created the hyper growth in China. Local governments in China and self interested investment banks in the US and Eu pushed for this growth and the central government failed to act with restraining action. The result is alienated public in the US and EU, intense trade and competitive frictions and permanent damage to friendly US China, US EU relations. The domestic side of this hyper growth was the overdependence on the property sector which was asked to carry a bigger burden for development leading to the crisis today with local governments strained for financing by $900 billion as reported in WSJ today July 31. 2022. This did not need to happen. China entered this experiment with capitalism without restraining action with very little knowledge of the market economy and how it operates correctly only with restraining and corrective action in the interests of the whole people of the country. Too much has gone wrong for peoples on either side, the unintended effects and consequences in the simple unbridled pursuit of self-interest alone.

Linked Articles

China’s Economy Tested by Strained City Finances

WSJ 07/31/2022

Wall Street Journal Staff

WSJ 07/31/2022

To age well and stay fit take the Yoga Way

11/30/2020

Strengthen the knees with the bridge and other yoga poses that involve weight bearing. This is very important for anti-inflammation say experts, particularly as one grows older. This along with eating right for gut health with more fibre in the diet and daily exercize provides the basic components for ageing well into ones eighties, say experts.

Linked Articles

New to yoga? Do these 5 things to protect your back, shoulders and wrists

NBC News 07/23/2019

NBC News 07/23/2019

A Tale of Two Italian Cities - Bergamo, Lombardy and Vo, Veneto- In the time of Coronavirus

04/12/2020

Bergamo in Lombardy, northern Italy, did not heed the warnings calling for strict quarantines, Vo in Veneto region did contact tracing and strict quarantines. This made all the difference. Bergamo turned into a disaster, Vo recovered quickly. Vo is 85 miles to the east of Bergamo. This is a warning to cities around the world, act late and without strict quarantine or lockdown and there is a huge disaster looming from the coronavirus spreading quickly, because it is in the words of Dr Birx "very, very contagious."

Linked Articles

Italy’s Slow Progress in Fighting Coronavirus Is a Warning to West

WSJ 03/27/2020

Eric Sylvers In Milan, Margherita Stancati In Rome

The Times 03/26/2020

Tom Kington, Rome

Donald Trump's proposal for 45% tariff on China's exports to the U.S.- how a policy of bringing jobs home could lead to the loss of 1 million U.S. jobs

03/08/2016

By damaging the international trading system including with allies such a Canada, Britain, France and Germany, the result of a downward spiral through higher tariffs in other countries, could end up costing the U.S. 1 million jobs. Under such a system the U.S. would lose many of the advantages of its booming tech sector, its tech driven global advantages in many industries, without signifcant gains in low cost imports such as clothing which would simply migrate to other countries such as India. The problem of worker wage stagnation in the U.S., and loss of jobs in certain sectors, is very real, but this is the wrong way to tackle the problem. China is already moving towards a consumer driven economy. Economists show that trade with Mexico would be seriously hurt both ways, creating more pressure of migrants at the border under such proposals as a 45% tariff and its indirect effect on Mexico, when the actual fact is that net migration from Mexico is the lowest it has ben in decades. Politics can do strange things as when two senators Smoot and Hawley from agricultural states Utah and Oregon, at the head of important committees in the U.S. Congress pushed and passed legislation for a 60% tariff in 1930 for the industrial sector they had no idea about. When Smoot and Hawley lost reelection in 1932 they left behind a lot of damage, especially for the farmers and workers they thought they were fighting for.

Linked Articles

How Trump’s Hard Line on Trade Could Backfire

Wall Street Journal 03/25/2016

Bob Davis, Bob, Davis

Wall Street Journal 03/08/2016

Holman W. Jenkins Jr., Holman, W., Jenkins, Jr.

The miscalculations and missteps of Russian president Putin in 2014 leading to a major crisis for the Russian economy in 2015

12/18/2014

A major miscalculation was totally misjudging Merkel and post-war German public opinion about policies that remind people about the period between the two World Wars- this is anathema to Germans who see the European Union as a way to build a new and different Europe. The other miscalculation was on how a foreign adventurous policy in Syria would affect Sunni world opinion, in particular Saudi Arabia. Just as Brezhnev took Russia into Afghanistan where Russia had no vital interest leading to eventual Soviet collapse, Putin risked alienating a key member in OPEC pricing moves and hurting Russia's economic interest. By not listening to Kudrin, the head of Sberbank, and other economic advisers from the first and second terms of the Putin-Medvedev administrations, Putin opened the door to two years of serious missteps, risking the very real accomplishments of the first and second term of creating a stable growing Russian economy with close economic ties to Europe. The only positive outcome of the crisis and low oil prices would be making the shift away from oil dependence, which was talked about but never seriously attempted in the Putin administrations. For this to happen major new investments would have to be made and technology links to the outside strengthened, both hammered by the missteps in 2013-2014. The irony of all this is that Putin gained the support of rural Russians in the countryside in the 2012 presidential elections by promising no return to the economic crisis conditions following earlier ruble collapses. Now by ignoring Kudrin and other wiser counsel from the first and second administrations he does just that.

Linked Articles

Putin’s Year of Defiance and Miscalculation

Wall Street Journal 12/18/2014

Gregory White, Gregory, White, Anton Troianovski, Anton, Troianovski

Wall Street Journal 12/18/2014

Alexander Kolyandr, Alexander, Kolyandr, James Marson, James, Marson

U.S. households debt to income ratio drops from 130% in 2007 to 108% in 2014, still above historical ratio of 90%

02/18/2014

High student debt of over $1 trillion, banks restricting home loans to higher credit scores, continuing effort to reduce credit card debt, limit spending as U.S. consumer spending recovers very gradually.

Linked Articles

Americans’ Debt-Cutting Levels Off

Wall Street Journal 12/12/2014

Neil Shah, Neil, Shah

New York Times 02/18/2014

Shaila Dewan, Shaila, Dewan

The risks to Chrysler in 2013-2015 with delayed new and redesigned models, and higher incentive costs reducing margins

07/31/2012

Lower cash flow from the demands for new and redesigned models in a very competitive market, the higher incentives costs reducing margins, combined with losses in the Fiat European operations, will pose challenges for Marchionne in 2013-2014.

Linked Articles

Chrysler Profit Up, Cautions on Spending

Wall Street Journal 01/31/2013

Christina Rogers, Christina, Rogers

Wall Street Journal 07/31/2012

Jeff Bennett, Jeff, Bennett

The inaction at GM 2009-2013 for the defective ignition switch recall and the inaction at Toyota for unintended acceleration recall

02/10/2010

GM's management lost track of quality issues that were buried at lower levels during the bankruptcy period. Toyota's management in the U.S. referred the NHTSA to quality managers in Japan who did not make the necessary effort to look into and address the problem. This shows that quality is not just a technical issue for the engineers and requires management atention at the highest levels, direct reporting to top managers. It also shows that quality problems never go away, will always be present, no matter how good you think you get. Small mistakes can be very costly as BP, TEPCO in the Fukushima nuclear disaster, Toyota, have shown in the recent past.

Linked Articles

General Motors Misled Grieving Families on a Lethal Flaw

New York Times 03/24/2014

Hilary Stout, Hilary, Stout, Bill Vlasic, Bill, Vlasic, Danielle Ivory, Danielle, Ivory, Rebecca R. Ruiz, Rebecca, R., Ruiz

New York Times 02/10/2010

Eric Lichtblau, Eric, Lichtblau, Bill Vlasic, Bill, Vlasic

The Economist cites IMF economist estimates that the public debt of the 10 largest industrialized countries will jump from 78% to 114% of GDP by 2014, leading to higher interest rates and inflation.

06/11/2009

The rising public debt and its unsustainability is what the future holds. For governments and decisionmakers there are very difficult choices, as fiscaly austerity and premature fiscal tightening or raising interest ratescan choke off a recovery. Raising taxes as happened earlier in Japan's lost decade also can choke off a recovery. Seriously tacklig health care costs and raising the retirement age, are much needed steps.

Linked Articles

Get Ready for Inflation and Higher Interest Rates

Wall Street Journal 06/11/2009

Arthur B. Laffer, Arthur, B., Laffer

Economist 06/11/2009

Economist.Com

How global imbalances in savings were ignored as the risks increased.

12/26/2008

Prof. Portes on global imbalances in savings. What happened and why the risks were not understood by Bernanke, Greenspan, and others. The view that successful models are very hard to change, reluctance in China to disturb the status quo, and the difficulty of getting people to accept the need to move away from this without a crisis.

Linked Articles

Imbalance in Nations' Savings Clouds Forecasts for Recovery

Wall Street Journal 03/23/2009

Mark Whitehouse, Mark, Whitehouse

New York Times 12/26/2008

Mark Landler, Mark, Landler

Two pioneers in the car industry, one Tata Motors in very small economical cars from India and the other BYD in economical electric cars fro China.

01/08/2008

BYD and Tata Motors are pioneers in economical small cars and electric cars. Both have a good shot at accomplishing their goals and taking leadership position in their field because of the low cost high quality technical manpower they have, the vision of the head of the company, and the early start.

Linked Articles

Technology Levels Playing Field in Race to Market Electric Car

Wall Street Journal 01/12/2009

Norihiko Shirouzu, Norihiko, Shirouzu

New York Times 01/08/2008

Anand Giridharadas, Anand, Giridharadas