1. Brief Review of Lecture 4 on the Japanese Economy --- The Japanese economy is growing faster now than in the past. Currently, the annualized QoQ growth is very high at a 6.7% rate for 2014 Q1. This is expected to fall greatly in the next quarter due to the effect of the consumption tax rise. A more realistic but optimistic estimate of 2014 growth in Japan would be about 1.5% - 2%. --- The unemployment rate has ticked up recently from 3.5% to 3.7%, but this may be due to people entering the workforce because jobs are becoming available. --- Japanese productivity showed very strong growth from 2013, but fell considerably in April, recovering slightly in May. --- Inflation has shown signs of falling again into a deflationary mode with June data. This is perhaps surprising. --- The Deficit to GDP ratio fell indicating that output growth has been stronger than the rise in government spending

2. --- The industrial production index for Japan fell a surprising 3.3 % in June and this has led to speculation that Abenomics may not be working well and that the Japanese economy might be moving back to stalled growth. The IPI in the next month in August will be very important. --- Japan’s current account to GDP has been falling steadily since 2008 from 4.8 % to 0.7 %. Imports have grown faster than exports since 2008. However, exports have taken off after 2013 due to a weakening yen. Energy imports have hampered policies to revive the country. --- Japan faces enormous difficulties in implementing structural reforms to agriculture, bankruptcy laws, market opening measures, and labor market reforms. Also, there are the issues of whether to return to nuclear power, how to stimulate new births, how to deal with debts, health care, and an ageing population, as well as how to deal with a more strident China. See Haidar and Hoshi 2014See Haidar and Hoshi 2014

3. The Development of the Global Economy China as the World’s Factory – The need for redirecting resources and rebalancing

4. Problems with the Chinese Economy Lecture #5

5. How is China Doing on Growth, Unemployment, and Inflation? China is Doubling the Size of Its Economy Every Nine Years

9. What can we say about China’s Unemployment ? Note: The Official Rate does NOT respond to movements in economic growth.

10. China's unemployment rate, for instance, is almost always low. And it doesn't fluctuate much. In December, the official Chinese rate was 4.1 percent. It's remained between 4 percent and 4.3 percent since 2003. But the CIA notes that China doesn't count among its unemployed the migrants who flock to Chinese cities in search of work. Once you include them, China's unemployment rate looks more like 9 percent.

11. China’s Youth Unemployment Rate is especially worrisome. Not everybody that Goes to University Get a Job. Source: China Household Finance Survey in 2012 The Graph Above Indicates that Getting Educated Does Not Help the Average Student

12. Data Here is People for 25 Years and Older whereas China’s Data is for People 21-25 Years of Age. Most Countries are Not like China,,, for example... the US

13. Not much discussion of this in the news, but China has been into a trend of deflation. This is particularly bad news since successful rebalancing would require strong consumption and reduction in investment. Hard to see that in the data above.

14. Year on Year (YoY) seems to show a disinflation going on, although the annualized and the YoY may be contaminated with some seasonal effects. On nevertheless gets the feeling of a slowdown in China rather than a pick up in economic activity. Sellers are having to hold back on their price increases in order to make sales.

15. China began in 1991 increasing its fixed investment and reducing its consumption as a percentage of GDP – rebalancing has not really begun

16. China’s Trade Surplus is falling relative to GDP and is down to 2% of GDP.

17. China’s Consumer Confidence Data is Looking More and More Choppy and Uncertain. This is not a good signal. Trend is also down. In China, the consumer confidence index is based on a survey of 700 individuals over 15 years old from 20 cities all over the country. This composite index covers the consumer expectation and consumer satisfaction index, thus measures the consumers' degree of satisfaction about the current economic situation and expectation on the future economic trend. The Index measures consumer confidence on a scale of 0 to 200, where 200 indicate extreme optimism, 0 extreme pessimism and 100 neutrality.

18. In China, Housing Index is measured by year over year change in house prices in 70 medium and large cities.

19. China’s Ghost Cities Continue to Worry the World This Isn’t Paris

20. All the Houses are Sold but No One is Living in Them -- Yet

21. If You Build It They Will Come – Right?

22. Incredible Fast Changes Occurring to China What do you Think ?