Big GM investment in China

 

GM reached out to China's auto firm SAIC in the late 1990s, and the fruits of that JV continue to pile up, according to the WSJ last Thursday:

General Motors C. and Chinese joint-venture partners agreed to build a third commercial vehicle factory in southwest China to meet growing demand and protect GM's status as the largest auto maker by volume in the country.

$1b plant looking to crank 400k vehicles by 2015, giving GM and its partners a total capacity of 2m vehicles. China's light vehicles market will top 20m next year, while the US remains around 15m.  600 or so new dealerships planned across China, bringing the volume to 3500 total.

Nothing marks you more fully as globalization's demand center than to have the car market.  That was America in the 20th century, and it's China in the 21st.

Getting Arctic hydrocarbons will be a lot harder than anticipated

FT special report on Canadian energy that highlights the difficulties of accessing Arctic oil and gas and bringing it economically to market.

First is the sheer remoteness.  Then there's the extremely hostile environment.  Even with the ice-clearing in the summer, the genuine window for exploitation is still measured in weeks.  Everything you use must be special built, platforms with extreme reliability.

And the fields in question need to be big - really big - to cover the high costs.  

In short, only the majors and supermajors should apply, because only they will have the "financial firepower."

This is all before governments issue ever stringent safety requirements to protect the environment, a bar that rises with each Deepwater Horizon.

Finally, there's how you get it to market, with the big choice being between fixed pipelines and ice-class shuttle tankers.  Neither is cheap.

Just a bit of cold water thrown on the anticipated "bonanza."

I note it with interest as I write the final report (while traveling most of the week) for Wikistrat's recent "How the Arctic Was Won" simulation.

The micro-corollary of sovereign land sales: wooing foreigners to unsold properties

Again just back to a pet notion of mine:  all this debt + demographic aging in the West is going to lead to some countries selling off or making available for sale things that otherwise would not be considered to outsiders they would also not otherwise tolerate.

Point came up in recent Wikistrat sim on the Arctic:  Can you imagine China buying its way onto the Arctic Council by so bankrolling/purchasing/whatever a member state (bankrupt Iceland, independence-minded Greenland, etc.) that it effectively captures its seat.  I know, it sounds impossible, but then you remember how America got its seat (Alaska).  But then you say, those were different times when bankrupt states or overstretched regimes would sell off that which they could no longer manage/exploit/defend (like Russia on Alaska).

But then I wonder:  why can't we collectively head back into that territory with all this debt and demographic aging in the West.  Is this not the elderly couple downsizing their house - just writ large?

So you look at Spain right now, and the NYT headline reads, "Spain woos foreigners to thin its investory of unsold homes."

Now, Spain has always been sort of interesting on immigration - as in, innovative.  They wooed foreign workers in the good times, and then subsidized their return home in the bad times.  So now they're being aggressively innovative in the bankrupt times.

But it gets you thinking, huh?

Great summarizing FT article on "global food security" risk

Notice the equatorially-centric band? Remind you of another map?

Starts by calling farmers "the canaries in the mine when it comes to climate change."  Brilliant.

What affects farmers affects the global food supply and causes the price rises that hit middle class wallets and increases the risk of hunger for the world's poor.

CC isn't the "only culprit" when it comes to good security.

The primary drivers, the article notes, are population growth and the stunning growth of the global middle class, which, as we know, likes to eat and eat well.

Next is the loss of land to food crops due to urbanization and the diversion of crops to fuels (dumbest idea in human history).

But here's the quote that caught my eye:

If these were the only pressures on the global food supply, feeding the world sustainably could still be achievable, says Jerry Nelson, a senior research fellow at the International Food Policy Research Institute (IFPRI).  "If you didn't have climate change, you could tell a story about how it will be challenging and how we need to invest more in productivity, reduce waste and manage international trade," he says.  "But this would be something we could accomplish.

"When you throw climate change into the mix, that makes everything a lot more difficult."

Or better said - with regard to risk - more uncertain.

Great little piece in "FT Special Report: Managing Climate Change."

The Chinese Communist Party comes up with new "test" for industrial projects

Thanks to growing grass-roots protests by Chinese citizens over big industrial projects, the NYT reports that the government there now says all such plans must pass a "social risk assessment" prior to final approval.  

Interesting choice of terms, yes?  The environmental impact is what the people worry about, but it's the "social risk" that gets the government interested.  Apparently this has been done in some local governments for a while now (the experiment, per the Chinese way) and now it's being adopted on national scale.

China already has environmental impact studies, and now the government says (as of 1 Sept) that they must be posted on the internet (also interesting).

Environmental minister says, "By doing so, I hope we can reduce the number of mass incidents in the future."

The tipping point?

Enviro protests used to attract only the old and retired.  Then the young started showing up in numbers, and that's when the Party got scared.

China is, as I argue, on the verge of a huge and prolonged progressive era.  All sorts of things to clean up. Each time such steps are taken, just a bit more power to the people - always defensively offered by the government.

Big surprise: Asia wants a regional trade bloc that includes China

The Obama Administration's big idea was a Trans Pacific Partnership that magically excluded China.  It is the lynchpin, along with the "strategic pivot" of US military forces into East Asia, of his dreamt-of 21st century containment of China's rise.

The "pivot" idea is merely stupid, but the TPP was magnificently dumb.

We encouraged China's rise (after encouraging the tigers and before that South Korea and Japan) by playing regional military Leviathan and enabling their export driven growth by keeping our markets open.  The implicit deal:  take that trade surplus (now consolidated by assembler-of-last-resort China) and plow it back into US debt markets, keeping our dollar cheap and enabling more of the same (we import goods, we export security, everybody peacefully rises, and the world is a better place).

That transaction strategy, as I have called it, worked wonderfully for years and years.  But it came to its logical endpoint in the crash of 2008.  We simply can't sustain such a grand strategy any more and, frankly, we don't need to.  Asia is risen, it remains peaceful, and its logical regional integration now proceeds.

Can we still play Leviathan in this process?  At great cost, yes, but a Leviathan is not what is needed now. It is now longer a possible achievement, given China's rise, and attempting to maintain that status now only gets you unnecessary tensions and arms racing.  

Instead, the economic integration needs to be matched by suitable regional security arrangements.  Those arrangements tend to come via crises or hotspots like the South China Sea issue.  You either fix them or they fix you.

The new grouping is seen as a rival to a trade initiative of the Obama administration, the 11-nation Trans-Pacific Partnership, which includes many of the same countries but excludes China.

The announcement came as China was facing pressure to back down from its hard-line stance in its disputes with four Southeast Asian countries over ownership of islands in the South China Sea.

What ASEAN's proposed Regional Comprehensive Economic Partnership says is that, no matter the lingering tension on the islets issue, Asia's economic and trade and investment integration will proceed.  And no, it won't be held hostage to Obama's containment fantasies.

Some analysts in Asia describe the Obama administration’s trade initiative as one element in a policy to contain China, the world’s largest producer and exporter of manufactured goods.

“China’s exclusion is strange, given its huge economic presence in the Asia-Pacific” region, Amitendu Palit, a visiting senior research fellow at the Institute of South Asian Studies at the National University of Singapore, wrote in a recent edition of East Asia Forum. “This has given rise to views that the United States is driving the Trans-Pacific Partnership with the strategic objective of marginalizing China.”

There are plenty of Chinese behaviors that we need to work, but we're no longer in charge of how things unfold in Asia, and no amount of military hardware parked there is going to change that.

Africa: investments and insurgents

Pair of WSJ stories:  first one on Carlyle Group joining the list of private equity firms rushing in with yet another Sub-Saharan Fund; and second on EU debating whether to fund a cohort of West African states looking to combat the radical Islamic militias that have taken over northern Mali with the intention of setting up their own separate state.

The combination is - to me - telling of that dynamic of rapid frontier integration that I'm always going on about.

Africa is, of course, not really a frontier in a settling sense, but it is one in a globalization-investment-trade sense.  And when you're a frontier in that sense, it's not surprising to see both dynamics in play, as the "rush" of connectivity creates its own blowback (the central theme of my books).

From the first piece:

The investments, and Carlyle's nascent Sub-Saharan Fund, targeted at $500 million, show how private-equity firms are trying to position themselves to tap into the continent's new consumers as well as companies that are expanding on the back of demand for food and energy from the rest of the world.  Competition among global rivals is heating up in Africa, as investment returns diminish in more developed parts of the world.

From the second piece:

West Africa countries are trying to set up the force to help Mali to regain control of its northern half, which is under the sway of the al Qaeda affiliate, known as al Qaeda in the Islamic Maghreb, or AQIM.  The nations say northern Malie is becoming a haven for violent groups that live off kidnapping and trafficking as well as a training ground for terrorists who could destabilize the whole region.

I mean, seriously, I bet I could find you similar stories in U.S. East Coast newspapers from 1870-something that describe new funds and new military efforts being launched for the American West.

The speed of both dynamics is, in terms relative to even our recent past, rather stunning.  The worst thing I wrote in The Pentagon's New Map concerned my pessimism over Africa's future.  I just had the whole thing taking far longer than it is.

And that's a real lesson for me.

Obesity epidemic: one variant of the punitive approach

WSJ headline says Denmark scraps it's "much-maligned 'fat tax' after a year."

Danish lawmakers have killed a controversial "fat tax" one year after its implementation, after finding its negative effect on the economy and the strain it has put on small businesses far outweigh the health benefits.

Nations including Switzerland, the U.K, and Germany have held up the tax, which applies to any food containing more than 2.3% saturated fat, as a potential model for addressing obesity and other health concerns. But in Denmark, it has been a source of pain for consumers, food producers and retailers as the nation's economy struggles.

"The fat tax is one of the most maligned we [have] had in a long time," Mette Gjerskov, the minister for food, agriculture and fisheries, said during a news conference Saturday announcing the decision to dump the tax. "Now we have to try improving the public health by other means."

The failure of Denmark's fat tax is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times. Products such as butter, oil, sausage, cheese and cream were subject to increases of as much as 9% immediately after the new tax was enacted.

"What made consumers upset was probably that an extra tax was put on a natural ingredient," said Sinne Smed, a professor at the Institute of Food and Resource Economics.

The fat tax comes to an end after netting an estimated €170 million ($216 million) in 2012 in new revenue. Danish lawmakers will slightly raise income taxes and reduce personal tax deductions to offset the lost revenue. The lawmakers also decided on Saturday to reverse an earlier decision to create a sugar tax.

"This is not what is needed in the current economic situation," said Holger Nielsen, Denmark's minister for taxation.

Human bodies are designed to crave fat, especially when we're stressed.  The body is telling us to store up because things seem dangerous.  This is evolution talking:  if things are going south, better to stockpile fat now for the bad days ahead.

Problem is, modern life creates all sorts of stresses and modern food companies love moving this sort of product, because it nets them the highest profits.

End result:  an obesity epidemic.  The food companies know how to trigger our interest, and life provides all manner of stimuli that triggers our desire.  The cost is pushed downstream.  

Governments want cheap food but then regret the healthcare bill that follows.  Governments then try to go punitive - actually on the consumer - by issuing a fat tax that the sellers pass on directly.  Consumers get mad, tax gets scrapped.

Conservatives yell, "nanny state."  But in truth, Western governments already lavish the ag and food industries with subsidies that encourage all this, meaning the nanny state is already here, she's just encouraging us to eat the worst sorts of food (or the most profitable to sellers).  In relative terms, veggies and fruits aren't subsidized, grains are.  So we're being fatted up by our nanny state for the healthcare providers.

Governments can't disincentivize bad eating by taxing people.  They need to rejigger the already bad incentive system for ag and food companies.

Still, the fact that states are trying is an indicator of the progressive agenda that eventually must come.

But Big Food wins another round ("See, the evil government is trying to deny you your bad diet!"  Cha-ching!)

No-fault separatism thanks to globalization

Old argument of mine:  globalization comes in and all manner of divorces ensue.  Typically it's a fake state in the Gap that's coming apart at the artificial seams, but the larger point is, the more overarching multinationalism you have, the lower the cost of divorce/remapping.  You're going to be together anyway (you still have the "kids" of the union), but why stay together if you don't have to?

Europe demonstrates this:  the more integrated it becomes, the more states appear.

Great FT one-pager on "long-simmering separatist movements . . . gaining strength."  You might think it's the Eurozone troubles that is responsible, but that's the proximate opportunity - not the ultimate enabler.  Real federalism is coming, so why not get out of your unhappy marriage in the bargain?

Here's the counterintuitive part: it's often the most competent and richest that want out.  The better want to leave behind the worse.

So this isn't about suffering.  This is about ambition.

China not-so-bad sign: no longer growth-at-all-costs

Nice NYT story on growth of (primarily) middle class resistance to unlimited growth ambitions WRT environmental damage.  Most experts who track the grass-root democracy arising in China have noted its strong concentration in the environmental realm.  

It's a natural development that we've seen everywhere else a middle class historically arises:  once you get to a certain level of GDP ($4-7,000) you start caring about the environment a whole lot more.

Chart shows all the places where projects have been delayed/cancelled in response to popular demands.

Point being:  all part of the natural slowdown in growth that comes with modernization.  Things get more complex.  The public puts up with less crap.  China is not different in this regard whatsoever.

As I've noted for years now, Asian countries that modernize and open up to globalization typically do so as single-party states (either explicit or de facto) for about 5 decades.  Then things change.

That logic says China goes democratic in the 2020s - or faster.

China bad sign #2: young professionals leaving in record numbers

Yes, a brain drain as reported in the NYT.

At 30, Chen Kuo had what many Chinese dream of: her own apartment and a well-paying job at a multinational corporation. But in mid-October, Ms. Chen boarded a midnight flight for Australia to begin a new life with no sure prospects.

Like hundreds of thousands of Chinese who leave each year, she was driven by an overriding sense that she could do better outside China. Despite China’s tremendous economic successes in recent years, she was lured by Australia’s healthier environment, robust social services and the freedom to start a family in a country that guarantees religious freedoms.

“It’s very stressful in China — sometimes I was working 128 hours a week for my auditing company,” Ms. Chen said in her Beijing apartment a few hours before leaving. “And it will be easier raising my children as Christians abroad. It is more free in Australia.”

As China’s Communist Party prepares a momentous leadership change in early November, it is losing skilled professionals like Ms. Chen in record numbers. In 2010, the last year for which complete statistics are available, 508,000 Chinese left for the 34 developed countries that make up the Organization for Economic Cooperation and Development. That is a 45 percent increase over 2000.

Guess who wins this lottery, as usual?

When experts note that China modernized and marketized and opened-up to the world for the past 40 years and the Party still rules, they miss the reality of what happens when a critical mass middle class appears and starts wanting more than just a rising income.

That day has arrived.

So no, it's not a question of "Can China ever go democratic?"  It's only a question of when.

There is nothing unique about Chinese or Asian civilization in this regard.  Modernization is modernization.  People are people.  Democracy isn't achieved because it's fabulous.  It happens because it's the best worst system you can manage when you reach the point of genuine development.

How Romney (and the Republicans) are screwed by demographics

Pair of WSJ stories.

Front-pager lead from yesterday notes that "Election May Hinge On Latino Turnout."  Get used to that headline, and get used to it working against the immigration-unfriendly GOP.

Obama is currently polling at 70% (Romney 25%) among the fastest growing segment of the electorate.

The key to Obama's win, we are told, is getting out the vote.

Second story covers that in a way that will infuriate Republicans, but it's their own damn fault:

Thousands of illegal-immigrant youths are at the forefront of national efforts to get immigrant and Latino citizens to the polls next week, the latest demonstration of the increasingly organized and vocal group's power.

In swing states like Florida, Ohio and Colorado, the young people—often referred to as Dreamers after the failed Dream Act legislation that would have offered them a path to citizenship—are running phone banks, going door to door and approaching students on college campuses to encourage voting. They also are active in California, a Democratic stronghold, and Texas, where Republicans have the edge.

The group is targeting Latinos, the fastest-growing electorate in the U.S., whose turnout at the polls is traditionally lower than that of blacks and whites. Polls show an overwhelming advantage for President Barack Obama among Latino voters, but the Dreamers efforts also could boost Democratic support in state and congressional races, supporters and opponents agree.

The revenge of the denied citizens!

We shoot ourselves in the foot regarding Latin America, which, over the long term, is our greatest source of economic growth and ultimately power.

We shoot ourselves in the foot over immigration and drugs.

Immigration is what keeps this country "young."  We are mean age 36 right now, but that will rise to just under 40 at 2050, primarily because of immigration and the high fertility associated with that (for the first 2-3 generations).  By way of contrast, China, which is also 36 years old now, will reach almost 48 by 2050, which will constitute a huge drag on its economy.

But China's long-term advantage is this:  it's surrounded by younger regions poised for lengthy demographic dividends (high proportion of workers to dependents).  First there's SE Asia, which will enjoy a demographic dividend on par with China's of the last 4 decades, and then there's India, which will enjoy an even bigger one through mid-century.

Being surrounded by faster growing economies is a sure way to lift your own as growth tapers off due to modernity, advanced status, slowing demographics, etc.  So, long term, China gets a lot of help.

We could too via Latin America, if we didn't make the drug war the centerpiece of our foreign policy throughout the hemisphere.  Instead, we cede a lot of that growth to others (Europe, Asia) when we should be expanding southward as a center of gravity in free-trade zones and ultimately as a multinational union.

But that will all come with time.  We just don't have any political leaders with genuine vision.

But get us to 2050, when one of three US voters will have some Hispanic blood in them?  Hmm.  Much will change.

Republicans will lose more and more elections until they change their anti-growth tune.  They are swimming against the tide called the future.

You rediscover your past when you plan on making some near-term history

It's that old Winston Churchill bit about how you can't think ahead into the future any further than you can reach back and remember your past.  It's a balancing act.

Neat NYT article on how Turkey is rediscovering its history via film ("As if the Ottoman period never ended.") Nothing says, "growing regional/global ambitions" quite like that.

The Ottoman period, particularly during the 16th and 17th centuries, was marked by geopolitical dominance and cultural prowess, during which the sultans claimed the spiritual leadership of the Muslim world, before the empire’s slow decline culminated in World War I. For years the period was underplayed in the history taught to schoolchildren, as the new Turkish Republic created by Mustafa Kemal Ataturk in 1923 sought to break with a decadent past.

Now, as Turkey is emerging as a leader in the Middle East, buoyed by strong economic growth, a new fascination with history is being reflected in everything from foreign policy to facial hair. In the arts, framed examples of Ottoman-era designs, known as Ebru and associated with the geometric Islamic motifs adorning mosques, have gained in popularity among the country’s growing Islamic bourgeoisie, adorning walls of homes and offices, jewelry and even business cards.

I know a lot of people harbor a lot of fears about Turkey, but I think it's the best thing that's happened to the Middle East in a long time.  If we didn't have a Turkey to play lead goose on the Arab Spring, we'd have to invent one.

Bring on the Gallipoli films (all four of them)!

The sad truth about a second Obama presidency

From David Brooks in the NYT yesterday:  the reality that a Romney presidency compromising with a Democratic Senate would lead to a decent amount of necessary reform (including dropping the Bush tax cuts), while an Obama presidency would lead to very little advance and continue the general political gridlock in DC.

Why?

Romney isn't much of a right-winger.  That's all a sales job that's been rather effectively ditched in recent days and weeks to emphasize he'd really rule center-right.  If he squeaks in, that's the mandate he'd have.  He'd be realistic, as he was in Massachusetts, with the Democratic Senate, and things would get done.  Plenty of compromises would follow, and Romney would largely be villified by the far-right - not the far-left.

In truth, Obama isn't much of a left-winger.  He'd continue ruling center-left, but the nutcases in the GOP-dominated House would continue doing their best to sabotage all progress, pushing him, in his second term, primarily into foreign affairs as a refuge.  For Obama to win, as he looks like he will (just barely), via a very negative campaign, he'll enter office with virtually no mandate.  Dems will be happy enough to forestall the GOP nutcases in the House, but we'd be looking at 4 more years of stasis (and no, the complete nonsense sales-job of America going whatever by 2016 under Obama doesn't register with me).  Frankly, I think Romney would likely do a far better job of finessing Obamacare (originally, Romneycare) into full existence.

I agree with Brooks' analysis completely.  As much as I dislike the vast majority of the Republican agenda, this is my primary reason for preferring Romney to a second Obama term:  I see the promise of advance under Romney; and I see virtually no chance of any under Obama.

And I prefer some progress to none - simple as that.

But, in truth, I have no individual say in the matter.  Indiana will go Romney by a wide margin, so my vote will be meaningless.

Squarespace holds on! Meanwhile, the latest from 538 on POTUS election

Always follow Nate Silver's site around election time.  

The long-term threat of debt

Interesting FT column by Satyajit Das.

Two important factoids:

• By 2008, $4-5 of US debt is required to create $1 of GDP growth; and
• China now needs $6-8 of credit to do the same.

There was a time for both countries (US in 1950s and China at end of Cold War) where $1-2 of debt would do.

Then an almost Marxian critique:

Debt became a mechanism for hiding disparities in the wealth distribution within many societies.  Increased credit availabiliby allowed lower income groups to borrow and spend, encouraging housing booms, in order to deal with the underlying problem of stagnant real incomes.

A bit skewed in its causality.  Credit has always been the mainstay of growth in a capitalist society.  Reducing its function to "hiding disparities" is a very narrow view.

The stagnant real incomes problem is hardly universal in this current era of globalization.  It is felt primarily in the West, where jobs easily cordoned off from global competition now suffer it greatly.  This is the "cost" of letting so much of the world into the global party called globalization.  We can decry this, but the cost of our privilieged standard of living in the past was the vast exploitation/disconnection of much of the world, or the have/have-not divide that Europe begat in its previous extension of colonial-globalization.

Is it worth to me to live in a far more just world to suffer this income stagnation?  

As a Christian who believes I'm not just here to hoard and tell others to go f#$K themselves, yes, it is worth it.

Did we get addicted to cheap debt in the vast transaction strategy we ran with the world so as to spread the international liberal trade order already deeply embedded in these United States (this multinational economic union)?  

We sure did.

Will we eventually run out of new sources of cheap labor in the global economy?  

Absolutely.  Within my life.  But that will be a better problem than today's.

So where do find growth in the future?

The rise of the global middle class - the best thing to ever happen on this planet - will force magnificent resource utilization revolutions.  This will dovetail with new environmental challenges (or the exacerbation of old ones). Again, these will constitute our best problems yet.

But massive adjustments must be made to protect the vulnerable amidst globalization's continued rapid expansion.  And great investments must be made to bootstrap our national economy into a more realistically competitive shape for the struggles to come.

And that's why higher taxes are coming for the rich in this world.  We enter a length redistributionist phase so as to avoid political tumult.  It is capitalism's great genius - in combination with democracy - to recognize these moments in history and to address them head-on.  Once the oncoming global progressive era works its necessary magic (and no, those ideas and leaders are - by and large - yet to emerge), such a burden for the rich will be less necessary.

But to pretend that tax cuts are the answer now, amidst the populist anger spreading across this planet and in particular this country, is to stay pointlessly dogmatic.  There is no one economic theory that rules throughout time.  There are seasons for each.

A foolish consistency is the hobgoblin of little minds.    

- Ralph Waldo Emerson

The real Turkey-Iran battle over Iraq

Blogged a piece a while ago about how Iranian products just aren't making it in Iraq, while Turkish ones are far more welcome.  This FT piece by Daniel Dombey (whom I cite a lot) argues that what the geo-pols consider Turkish empire re-building is undergirded for the most part in wanting to dominate export models (my read of his analysis).  Why?

Turkey has hit that middle-class phase where the people want to consumer a lot and thus imports rise - along with consumer credit.  Unless you combat that with exports, you end up a bit too much like the US.

Iraq has just overtaken Italy as Turkey's second-biggest export market, with the KRG leading the way.

Turkey has similar eyes for Syria and - ultimately - a post-changed-regime Iran.

These are good ambitions, the best kind of "imperialism" - really:  making consumers happier than the crappy regime that lords over them.

Growing vegetables in the future

WSJ story about vertical farming vision from Sweden.

Goal is to make food happen while farmland disappears (to urbanization and harsh climate change) and to be able to do so year-round in a northern clime. Then there's the local food angle (less transpo, etc.).

Critics say the economics won't work at this time, especially on the energy, but advocates say this is a long-term solution that will become economical as climate change raises the price of doing business in many parts of the world, triggering global shifts in food production and - presumably - migration.

Interesting stuff.

Interesting idea.  I think the notion may make some sense regarding vegetables, but I don't see either fruits (maintenance of trees too tricky) or grains (just can't get the volume).

On vegetables, they (and fruits) account for only 3% of US farmland use, which is overwhelmingly given over to wheat, corn and soybeans (and a few others).  So, given that reality, vertical farming for major urban areas may make economic sense on a major scale sometime later this century.

The coming global progressive era will focus on healthcare

WSJ story on Kremlin ordered crackdown on smoking rates, right after China "plans 'harsh' anti-smoking rules.

This is the reality:  with globalization and development comes heightened smoking rates, which in turn triggers massive healthcare costs.

Then there's the secondary reality that Old Core North America, sick of smoking a while ago, sent Big Tobacco packing (globally) and that led to those companies going heavy into emerging markets, spreading their . . . whatever.  So Big Tobacco is going to be given its second great historical "boot," which will push it into even more emerging markets and the merry chase continues - much like with anti-globalization terror networks (another great purveyor of death).

What does NorthAm Core turn to now as its own progressive era kicks in?  Bloomberg has already given you the clue with the mega soda pop ban.  It's obesity. 

We'll see that crusade shift to New Core in about a decade.

China's future captured in perfect lead paragraph/sentence

Here it is from a WSJ piece:

China's latest evidence of sputtering growth underlnes a dilemma for its incoming leaders: They can shore up the economy by doubling down on an exhausted growth model, or take a risky political bet on reforms that could worsen the slowdown in the short term.

That not only captures where China is today (as in, this quarter), it basically captures where China is for the next decade or so.  I mean, what happens to a "communist" party when the progressive era necessarily arrives?

Well, the first instinct is to try and run it yourself, maintaining single-party rule, but that's basically impossible. The pain meted out will create blowbacks, no matter whether you direct it at the "gilded age" elite or the increasingly demanding middle class or the decidedly put-upon working class.  Worse, in the end, you'll need to disappoint them all on some level, which is where that throw-the-bums-out dynamic comes in handy:  a party wins and does what is necessary, outlives its welcome, and then gets tossed.  But in a sustainable progressive era, the opposition party that then comes in also does its bit, just tackling a different segment until its welcome is worn out.  And so on.

That's how the US did it 1890 onward.  When the Dems or GOP won, they won big and ruled big and changed big, and we got a much better country for it. 

China lacks that ability due to the stultifying nature of single-party rule, which, contrary to our green-eyed fantasies, is NOT more agile or adept or bold or visionary in its leadership.  Instead, it is self-preserving in the extreme.  It's bread-and-circuses.  It rules by fear and in fear of its own public.  

The WSJ piece is all about giving more money to consumers and the "dangers" inherent to that process.  It's a proxy description of the coming democratization of China, because giving money to consumers is giving decision-making power to the average citizen, versus hoarding it within the elite.  It's the economic prelude to the democratic denouement.

China has already reached the democratizing point.  I still believe it will muddle along with years before taking the plunge, in part because of that stultifying nature of single-party rule.  If we're lucky, Xi Jinping will be a real leader, but even if he is, we'll most likely have to wait a good 5-7 years to see that turn out.  That's how long it will take him to consolidate power as the evidence for the needed change piles up all around him.

And yes, those two dynamics are deeply intertwinned.

America's job?  Don't provide any stupid excuses for Beijing to avoid facing their own realities.

The "strategic pivot" is just such an excuse, which tells me Obama and Co. don't really understand China.

Sad to say, Romney's answers are beyond stupid and have no chance of being implemented (thank God).