Japan

Japan is an amazing place!

Hike

I had an interesting hike this morning in Avon Lake.

It was raining and I could hear the drops hitting the tin roof of the old barn on Webber Road.

I saw a drake and a hen peacefully swimming side by side with the current.

There was hardly a car on the road.

Q3 GDP Growth

The breaking news reported by the Wall Street Journal is that Q3 GDP was revised up to 2.5%. This is great news. If the increase holds it is significant.

However, in spite of the increase there is no employment growth whatsoever. This is very concerning.

The Ohio Hall of Fame

As I understand, there is a Building Industry Association Hall of Fame in Ohio.

I find this curious and remarkable.

The Inflation "Volcano" in China

There looks to be some moderately sharp losses developing in Asian markets during Tues. trade. China seems to be the focal point. Markets there are down several percent.

This article might be part of the issue:

Hamlin, Kevin, 2010. China inflation 'volcano' may prove too hot for controls after cash surge. Bloomberg News, Nov.22.

Bottom line, there is a serious inflation situation developing in China that is perhaps already beyond control. The government is taking extreme measures in an effort to control inflation, however, the common people are being hurt severely.

Significant Development in Agriculture - Push Back by Australia

This news is a hugely important development for Asia:

Pannett, Rachel, 2010. Australia aims to address foreign-ownership fears. The Wall Street Journal, Nov. 22.

From the article, two meaningful passages:

"CANBERRA, Australia—Australia's center-left Labor government said Tuesday it will examine foreign ownership of the country's rural land and agricultural food production in response to a spate of takeovers that have triggered anxiety about job losses and broader concerns about food security."

specific concerns,

"Worries about foreign ownership have been mostly limited to the mining and energy sectors, where a wave of investment by Chinese state-owned firms has threatened a loss of sovereignty and price control over commodities such as iron ore and coal. But last week's delisting of wheat exporter AWB Ltd., an icon of the country's agri-business, highlights increasing pressure on the country's agricultural companies." bold added

Essentially, Australia is moving down the path toward nationalization of assets to protect against foreign ownership and loss of control. The addition of agricultural assets is a new development in the context of Australian politics. This is unprecedented!

I take this as an early warning sign of a major push back regarding who controls the world's agricultural assets, especially for Asian countries that do not have the means to produce enough food for massive domestic populations. Significant inflation in food prices underpins moves by various Asian countries such as China to purchase land in places like Africa and Australia. The local populations are reticent regarding these efforts having observed the consequences of such actions in other industries.

I think the next 50 years will be a good time for American agriculture!

My Talk in China, 2007 & Prof. Muzhi Zhou's Book

In 2007, I had the chance to make a tour of China with Prof. Muzhi Zhou of Tokyo Keizai University and others. I gave the following speech in Nanjing:

Global Supply Chain Management and the Megalopolis

These are the notes for the speech:

Nanjing Talk

The following link contains some photographs:

China

In general, the idea of the Megalopolis is important for China's growth and a good source of future business.

This is a book prospectus to translate Prof. Zhou's book on a related topic into English:

The Chinese Economy: Mechanism of its Rapid Growth

I continue to act as Literary Agent and Editor for this manuscript, which was originally published in Japanese and Chinese. Total sales are about 15,000 in Japan. The Peoples Press of China was planning to print 100,000 copies for sale. I think it is very important for Americans to read books originally published in Asia to gain a broader perspective.

Interested publishers should contact me at edmund_w@mit.edu for more details on obtaining rights. As a goal for 2011, I would like this manuscript to appear in English for the American and European markets.

Niall Ferguson and the Wall Street Journal

Appearing as the "Saturday Essay" this article in the WSJ is well worth reading, although there are some points to be challenged:

Ferguson, Niall, 2010. In china'a orbit. The Wall Street Journal, Nov. 18.

Overall, the article makes some claims that are perhaps a bit hard to support. I think historical analysis is extremely important, however like anything else there are different approaches. The article seems to overlook significant Chinese issues like health care, pollution, lack of natural resources, the implications of a fixed exchange rate, and the inflexibility of a centrally controlled economy where prices for goods are sometimes set.

I do think this statement from the article is somewhat correct:

"For many commentators, the resumption of quantitative easing by the Federal Reserve has appeared to spark a currency war between the U.S. and China. If the 'Chinese don't take actions' to end the manipulation of their currency, President Obama declared in New York in September, 'we have other means of protecting U.S. interests.' The Chinese premier Wen Jiabao was quick to respond: 'Do not work to pressure us on the renminbi rate…. Many of our exporting companies would have to close down, migrant workers would have to return to their villages. If China saw social and economic turbulence, then it would be a disaster for the world.'"

I would claim that by pegging the Yuan to the Dollar, China was first to start a currency war and has built an unsustainable situation as Chinese Premier Wen Jiabao states above. There is no support in the US to maintain the status quo in China when the basis is currency manipulation of the most severe type. Essentially, the US is subsidising Chinese economic growth and going into deeper debt to do so. This is a highly unpopular issue within US politics.

I am less clear regarding the following passage:

"Nothing is more certain to accelerate the shift of global economic power from West to East than the looming U.S. fiscal crisis. With a debt-to-revenue ratio of 312%, Greece is in dire straits already. But the debt-to-revenue ratio of the U.S. is 358%, according to Morgan Stanley. The Congressional Budget Office estimates that interest payments on the federal debt will rise from 9% of federal tax revenues to 20% in 2020, 36% in 2030 and 58% in 2040. Only America's 'exorbitant privilege' of being able to print the world's premier reserve currency gives it breathing space. Yet this very privilege is under mounting attack from the Chinese government."

It is not evident the exact meaning of "358%" mentioned above and attributed to Morgan Stanley. Perhaps this includes private debt along with public debt. If so, I am not sure this is a fair comparison to Greece. After all, the Greek economy has weak growth prospects and is much smaller.

I believe the cumulative national debt as a percentage of GDP is approaching 95%, see United States Public Debt. This is consistent with what I have read from many different sources.

The last issue worth exploring is the reason China lagged behind in wealth creation for many years. This is not an easy question to answer. My personal view is that the political system was to blame for much economic largess. Others believe that a surplus of labor precluded the application of industrialization as was done in Western society.

Americans need to focus on what needs to be done to get our economy back on track. The US economy continues to have the potential to be the growth engine for the world.

Start-Up Stagnation

A trend that is deeply concerning to me is the lack of new high tech business creation in the US during the past ten years.

I have written several times on this blog that the ultra low interest rates between 2002 and 2005 should have created huge amounts of new small businesses. Instead there was a housing boom, unprecedented growth in complex financial instruments, outsourcing, and in general a great deal of new debt. The eventual consequences in terms of the 2008 financial crisis were catastrophic.

I think America in some ways is still experiencing the effects of the .com bust. Further, the lack of capital for risky new ventures is alarming. The following link discusses this important issue:

The Venture Capital Depression

Now a far greater threat has arisen. Beyond risky start-ups, there is a drop-off in small business creation. This is important because every large business was once a small business. In my view, America's future in terms of wealth creation is at risk unless there is a pick-up in small business vitality.

This article published last week in the WSJ on a related topic has caught my attention:

Lahart, Justin, Whitehouse, Mark, 2010. Few new businesses sprout. The Wall Street Journal, Nov. 18.

This quote is extremely informative:

"In the early months of the economic recovery, start-ups of job-creating companies have failed to keep pace with closings, and even those concerns that do get launched are hiring less than in the past. The number of companies with at least one employee fell by 100,000, or 2%, in the year that ended March 31, the Labor Department reported Thursday."

"That was the second worst performance in 18 years, the worst being the 3.4% drop in the previous year."

Since small businesses are responsible for a significant percentage of job creation in the US economy, the outlook for unemployment during the next five years looks bleak.

Further, there continues to be a reduction in capital available for risky start ups, mostly in technology areas:

"Venture-capital firms invested $25.1 billion in the year that ended in September, up 10% from the same period a year earlier but still down 27% from two years earlier, according to Dow Jones VentureSource. Angel investment amounted to $8.5 billion in the 2010 first half—30% below the average level in the five years leading up to the financial crisis, estimates Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire." bold added

Folks should keep this observation in mind when planning for the future:

"'I've never seen seed capital so low,' says Mr. Sohl. 'This is alarming.'"

Old Financial Habits

One thing that bothers me a great deal is that in spite of perhaps the largest asset bubble of all time, many seem to believe the solution is a return to pre bubble practices.

For example, I sometimes listen to WZLX (Boston) in the morning. The radio station runs many adds the encourage home equity borrowing and other pre-recession business practices that were questionable. It is hard for me to believe that anyone would take these adds seriously.

The same is true for government policy makers. It is like these folks have run out of ideas and can only redo over and over again the practices of the past.

This quote sums up nicely my thoughts on the matter:

"... in tackling credit problems in housing and elsewhere, eternally misguided policy makers are striving to reinflate financial bubbles to create an illusory wealth effect to encourage spending patterns that were toxic to begin with."

Abelson, Alan, 2010. Off the scrap heap. Barron's, Nov. 20.

One o the benefits of a recession is to impress the need to change old ways. As I have written several times, my view is that there has not yet been enough financial pain to cause meaningful change.

Until changes happens at all levels of society, a low growth jobless recovery might last a long time.

Talks for Japan

I will be making some company visits in the Tokyo area between Nov. 30 and Dec. 3 for the MIT Industrial Liaison Program. Two abstracts follow.

Besides my work at MIT, I am involved with two start-up companies as scientific advisor. Aggeos is based in the Southwestern part of the US and the second company is in Cambridge, MA, near MIT. I very much believe that technologies developed at MIT should be commercialized as a means of creating new business and creating jobs.

Special thanks to GS1 for funding Auto-ID Labs and the two groups of people backing the start-up companies.

It is never easy to create something new. However, with the support of GS1 and folks from the business world, I think we can create some special technologies and companies.

I. Update on Auto-ID Labs and the Field Intelligence Lab

The MIT Auto-ID Lab has just completed a two-year cycle of research funded by GS1. The accomplishments include applied research in using a passive RFID tag as a sensor for structural beam deflection, sensing of fluid levels in tanks, and determining temperature. As the technology is refined, additional applications are anticipated in photovoltaics, electrostatic sensing, and indirect methods of sensing chemicals and biological organisms.

Other accomplishments include the application of metamaterials to enhance the readability of passive RFID tags along with novel applications of RFID in robotics.

For the next two years, Auto-ID Labs will focus on a wide range of topics that go beyond RFID and serve the core mission of GS1. The research agenda has the following underlying theme developed by Prof. Sanjay Sarma and Edmund W. Schuster:

"The Convergence of different technologies, standards and devices will play a central role in the research activities of the Auto-ID labs for the next two years. Through discussions with industry and academic leaders it has become clear that the integration of different technical standards in the GS1 eco-system is an emerging issue of great interest. Users often find the number of technologies and standards available hard to comprehend and let alone to integrate into meaningful and productive systems. The question often becomes 'Could even more productivity arise from integrating various standards?'"

Specific future projects include the following:

Lead (MIT)

-- Convergence of Carrier, Reader and Infrastructure Technologies

-- Better RFID Performance with Meta-Materials

-- Active Tag & Sensor Integration in EPC Network

-- Towards 10-cent RFID Tag Based Sensors

-- Emerging Auto-ID Technologies

Supporting Role (MIT)

-- Vision, Intelligence and Directional Guidance: Mobile Consumer

-- Free and Open Source EPC Tools - Fosstrak

-- Using Trace Information in Supply Chain Analysis with a Focus on Sustainability and Food Safety

II. Machine Understandable Semantics

Since 2003, various groups within the MIT Laboratory for Manufacturing and Productivity have conducted research on methods to achieve machine understandable semantics, namely to rapidly integrate data from different sources and to connect data to mathematical models.

The result of the research was the development of the M Language along with several software licenses available through MIT.

This presentation will explore two particular applications of the M Language, specifically,

A. Enterprise Resource Planning: Connecting Mathematical Models to Data Using the Internet.

Commonly provided by ERP vendors, master production scheduling (MPS) systems often strive to meet the needs of a large user base while limiting software functionality. Subsequently, business process reengineering becomes the means for firms to adapt to the limited functionality of MPS software packages. This talk develops a flexible approach for MPS delivery as an alternative to packaged software. The paper examines the general case of an open system architecture to deliver a specific master scheduling model to end-users. The open system approach fulfills a goal to standardize and speed the process of modeling in practice by creating a supply network for mathematical models that is searchable across the Internet with precision. The value lies on quickly putting state-of-the-art modeling in the hands of many users with no local computer implementation other than downloading an Excel spreadsheet.

B. Internet Architecture for Bio-Productivity

Genetics will always take the primary role in efforts to raise productivity for modern agriculture. However with recent advances in computing, data can play an important supportive role. This talk puts forth an Internet‐based architecture for computation that enhances bio‐productivity. The approach includes machine understandable semantics to enable data interoperability and connections to mathematical models. At the prototype level, a practical application from the Florida citrus industry demonstrates the concept. In general, future agricultural systems will be Internet based thus reducing cost and increasing capability. Standards organizations are certain to play an important role in this development, which might continue for the next decade or longer.

Food Inflation in China

There is no question that rising food prices are a source of great concern for China. Officials in Beijing are being to implement price controls according to the following article:

Peaple, Andrew, 2010. Inflated risks to economy in china. The Wall Street Journal, Nov. 19.

I think this is an important quote:

"Steps are under way to tighten policy, with the People's Bank of China raising interest rates and forcing banks to hold more reserves. Tighter control of new bank lending, and faster yuan appreciation—to help keep import prices down—would also help in the inflation battle. But they would also hit at key drivers of China's economic growth: loan-fueled investment and exports." bold added

It is extremely hard for me to understand why China does not scrap its currency pegging policy as a means of fighting domestic inflation. It is the best approach.

The text in bold above would indicate there is intent to maintain the pegging exchange policy even at the expense of rising food prices. The export interests are extremely powerful and appear almost to be a shadow government.

A Down Day for Wall Street

I notice that Dow Jones Future's are down about 40 points before the opening of trade at 9:30 AM Eastern. It could be a weak day on Wall Street.

Mr. Bernanke's comments about China's pegging policy seem to be having an effect on the market.

I think investors concerns are well founded. Though America will prevail in a currency war, global growth will suffer.

China has an inflexible position on currency pegging and will not back-off from the policy. Leaders in China desire trade only on their own terms. There are few if any win-win positions.

This casts doubt on the medium term ability of American companies to grow.

The Dangerous Course of Pegged Exchange Rates

Simply put, a policy of pegging of the Yuan by China is insane and will cause a great deal of global economic disruption, perhaps for decades. In my opinion there has already been considerable damage.

In fairness to China, I have reason to believe that the leaders there somewhat unknowingly built an unsustainable situation through fixing currency exchange rates to essentially protect businesses (mostly exporters) that have extremely thin profit margins. It will be impossible for Chinese leaders to reverse this policy without a wave of insolvency, a sharp reduction of economic growth, and the strong prospect for widespread civil unrest. However, it is important to note that Chinese leaders are responsible for their own actions, intentional or unintentional. As those in power often state, it is an internal Chinese issue and no other country should interfere. Unfortunately, "internal" issues have an important effect on the US and other countries.

This morning, I have read the following WSJ article with great interest:

Hilsenrath, Jon, 2010. Bernanke takes aim at china. The Wall Street Journal, Nov. 19.

These two quotes sum up the situation:

"By keeping their currencies artificially weak, Mr. Bernanke argued in Frankfurt Friday, China and other emerging markets are allowing their economies to overheat, preventing trade imbalances from adjusting and worsening what he called a 'two-speed' global recovery."

"Their 'strategy of currency undervaluation' is preventing more 'balanced and sustainable' global growth, he warns, echoing a view expressed by Obama Administration officials."

For years I have been expressing similar concerns relating to pegging and balance of trade.

Perhaps what bothers me most is that many American corporations made outsourcing decisions based on currency exchange rates that were manipulated. The full extent of the manipulation perhaps was not known until recently. This is underhanded.

In his speech, Mr. Bernanke goes on to make the following statement:

"On its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for years," Mr. Bernanke warned. "As a society, we should find that outcome unacceptable."

I think there is no "risk" of structural high unemployment. I believe it is now a reality that America needs to face. Many predict that the earliest America will reach 100% employment might be 2015.

From a policy perspective, I think the two high priority issues for the US Congress to debate and for the President to ponder involve the structural US Federal government deficit and China's pegging policy.

I do not believe that China will change its pegging policy. This is reckless. In its own way the Fed is dealing with the situation.

Tea Party members might want to reconsider some of their statements about domestic inflation and the dangers of Quantitative Easing II. Current American monetary policies are a direct reaction to the pegging of the Yuan.

Explained: the Global Currency Wars

This article was published on the MIT home page today:

Explained: the Global Currency Wars

The US Deficit - A Top Political Priority

Though I do not agree with all of the recommendations put forth, this article does highlight the importance of reining in deficit spending:

Feldstein, Martin, 2010. The deficit dilemma and obama's budget. The Wall Street Journal, Nov. 18.

This quote caught my attention:

"Surprisingly, the chairmen overlooked the easiest route to reducing the deficits over the next decade: scaling back the costly budget that President Obama presented earlier this year. Much of the projected doubling of the national debt between 2010 and 2020 reflects the spending and tax proposals in that budget." bold added

Further,

"The Congressional Budget Office estimates that those proposals would, if enacted, raise the 10-year budget deficit by $3.8 trillion, even after taking into account the president's proposed $1.3 trillion of new taxes on businesses and higher-income individuals. The $5.1 trillion gross cost of the Obama proposals reflects the cost of making the Bush tax cuts permanent for individuals with incomes below $250,000, of providing additional tax cuts for low- and moderate-income individuals, and of increasing spending on domestic programs."

The American political system must act in a decisive way to reduce out front budget deficits. Inaction will roil financial markets. The probable outcome; higher interest rates as increased government financing needs cause an oversupply of US Bonds and a decrease in bond prices. If bond buyers believe that deficit spending will cause inflation, then bond prices will drop even more perhaps causing stagflation (inflation in conjunction with low economic growth).

Though I have mixed feelings about Quantitative Easing II, I do not think the program will stoke much if any inflation because America continues to experience the after effect of the economic bubble burst. However, if deficit spending by government is projected over a 10 year period, then there is every reason to believe that bond prices will sink even if inflation is not a major problem with economic growth.

In all scenario's that I can foresee, unemployment will be high for many years into the future. This is an unfortunate situation.

Interesting Talk at ioT2010

One of the talks at the 2010 Internet of Things conference that I will be especially interested to attend is:

Semantic Middleware for the Internet of Things

Zhexuan Song (Fujitsu Labs of America, US)

Alvaro Cardenas (Fujitsu Laboratories of America, US),

Ryusuke Masuoka (Fujitsu Laboratories of America, Inc., US)

I have read through the paper and will take a deeper look before the conference. The approach put firth by the authors is a bit different as compared to what we did with the M Language although some of the objectives are the same.

I am always interested in situations where researchers take different approaches to the same general problem. It happens often.

Great Seminar - Dew Water Harvesting

I very much enjoyed the following seminar at MIT that was held yesterday and sponsored by Prof. Kripa Varanasi:

Dew Water Harvesting

The speaker:

Prof. Daniel Beysens,
CEA-Grenoble and ESPSI Paris Tech (France)
President, OPUR, International Organization for Dew Utilization

Some of the interesting ideas:

-- A typical structure that looks like a cone is preferred (it is best to have an angle on the surface).

-- Rain and dew water are different in several respects.

-- The purity of dew water is very good.

-- New surfaces produced will likely improve the efficiency of gathering dew water via spatial control of nucleation.

-- When water drops coalesce on a surface (smaller drops combine into larger drops) only a max. of 55% of the surface area is covered.

-- Some research involves estimating the max. amount of dew water available for an entire country.

These are just a few of the points covered in the seminar. I have some ideas for applications beyond the dew water harvesting process.

2010 Internet of Things - Final Registration

There is still time to register for the 2010 Internet of Things conference (Tokyo). The theme for this year is ioT for a Green Planet.

Details are at the following link:

ioT2010

In addition to a wide range of technical presentations there are a series of interesting workshops. In particular the Round Table on Internet of Things for a Green Planet features leading experts from around the world.

I will be attending ioT2010, arriving on Sat., Nov. 27.

This conference is the defining worldwide event for the Internet of Things, which many believe is the next stage in the evolution of the Internet. I think this is a highly worthwhile program to attend. No doubt, there will be many new businesses that arise from the technologies to be presented at the conference.

I hope to see some of the readers of this blog in Tokyo!

Japanese Agriculture

Some interesting statistics about Japanese agriculture:

"Japan has the lowest self-sufficiency ratio in the industrialized world. For example, only 40% of calories consumed in Japan are domestically produced, down from 50% in 1988, versus 65% in the U.K. or Switzerland's 52%, the government says. Agricultural output and the amount of land farmed continues to shrink, too."

"That result isn't for a lack of state largesse and protection: Fearing that the opening to rice imports—a product of the early 1990s Uruguay Round of trade talks—would hurt domestic agriculture, Tokyo spent $74 billion over eight years to aid farmers. But rather than spending more on projects to make the sector more competitive—by greatly increasing farm size and efficiency—almost 53% of the funds were spent on public works projects, such as roads and sewers. Only 0.4% went to nurturing new farmers, needed to replace the current crop, which is rapidly advancing in age."

Simms, James, 2010. Get politics out of japan's food fight. The Wall Street Journal, Nov. 2010.

There are many opportunities for American agriculture.

Prices for Agricultural Crops

With the apparent increase in inflation for China, and the corresponding government measures, I think there will be a lower growth rate for the country and less demand for commodities.

This could put downward pressure on agricultural commodity prices.

As a counter force, the Fed's program to pump money into the financial system (quantitative easing II) will likely put upward pressure on commodity prices.

At this time, it is unclear the stronger force.

The Global Imbalance

Emerging stock markets are always high risk for investors.

The case is no different for China where inflation appears to have become a major issue especially for food. Of all the products in a modern economy that can go up in price, food is perhaps the worst as it affects the poorest of the population in a disproportionate way.

The Chinese stock markets have experienced sharp losses during the past two sessions. Some believe that in spite of near 10% GDP growth for 2010, China will end the year negative in terms of stock price gains. If this happens, it is a very bad sign for 2011.

This statement published in the WSJ today is extremely important:

"China's recent slide is reflective of the great divide that separates emerging markets with fast-growing economies and inflation fears from those in the developed world, where deflation and economic stagnation are the main concerns."

Frangos, Alex, Fung, Esther, 2010. Inflation fears hit china stocks. The Wall Street Journal, Nov. 16.

In my view the "great divide" mentioned above is a direct result of pegging the Yuan and other measures that China has taken to ensure domestic economic growth. This has caused widely acknowledged imbalances in the global flows of capital and balance of trade.

I think the WSJ and other business publications need to focus on this issue through thought full analysis. In my view, not enough has been published on the issue during the past 10 years. Other domestic issues always seemed to take the front page!

Chinese Stock Market Sell-off

There was a sharp sell-off of Chinese stocks today of about 4%. This was for the mainland exchanges. There are few reports about the reasons for the sell-off.

Perhaps inflation pressures are damaging growth prospects for China.

The Unpredictable Bond Market

As expected, the US bond market is reacting in unanticipated ways given the formal announcement of quantitative easing II. Prices of 10 year government bonds have fallen!

This means that interest rates are rising! Of course this will hurt economic growth.

My blog post predicted such unanticipated consequences:

A Brief Analysis of Quantitative Easing II

Based on the following excellent article, I believe this is a short-term phenomena that reflects profit taking. Nonetheless, the end result is all that is important. For the near-term, interest rates are going up!

Gongloff, Mark, 2010. Bond market defies fed. The Wall Street Journal, Nov. 16.

One quote from the article should give pause to those who expect American economic growth for 2011:

"In an interview conducted last week, the Fed's new vice chair, Janet Yellen, defended the program [QE II], given an economic outlook that seemed to portend high unemployment, low inflation and lackluster growth for some time." bold added

"'I'm having a hard time seeing where really robust growth can come from,' Ms. Yellen told The Wall Street Journal. 'And I see inflation lingering around current levels for a long time.'"

I think folks need to prepare for a substantial period of modest economic growth (see 1937).

Predicting the Future

This blog post from June has proven spot on regarding the pegging policy of China:

Free Float of the Yuan

Simply put, I do not thing the Chinese government will change its policy of currency pegging anytime soon. Two powerful reasons underpin my viewpoint:

1. Removing the currency peg would likely cause widespread business collapse in China, especially among exporters. This is a major political constraint.

2. Pegging is fundamental to China's long-term aspiration to be the #1 economy in the world. Rising nationalism is ever present in the country.

The Chinese are good people. However, central government policies are counter to the international rules of engagement for trade.

A top priority for the President and Congress should be to formulate a reasonable strategy to deal with the current Chinese policies. I believe that the American political system is more than capable of determining the right thing to do.

In general, I welcome economic growth in China. However, if growth is at the expense of trading partners then it is hard to understand why this is good for America and the global economy.