Antonio Graceffo

“Saving corporates now is saving banks themselves,” said Ye Yanfei, an official at the China Banking and Insurance Regulatory Commission, expressing Beijing’s priorities in the coronavirus economic stimulus, saving the biggest corporations in order to rescue the economy (Bloomberg News, 2020).

According to Senate Intelligence Committee Vice Chairman, Mark Warner “The overwhelming number of counterintelligence cases in our country now involve Chinese nationals…The Chinese spy services are literally threatening Chinese families…If your son or daughter does not come back [from the US] and come back with intellectual property, you the family will be put in jeopardy” (Seldin, 2019).

China horded medical masks and supplies. They are now selling defective Coronavirus test kits, masks and equipment to other countries claiming to be helping. EU chief diplomat Josep Borrell warned the EU about China’s alleged coronavirus “aid” as having "a geo-political component including a struggle for influence through spinning and the ‘politics of generosity” (BBC, 2020).

As the coronavirus appears to be receding in China and spreading at an exponential rate across the globe, the Communist Party of China has rewritten the narrative, portraying themselves as the heroes of the coronavirus outbreak and potential saviors of the world.

There has been speculation that the coronavirus was unleashed on the world after it escaped from a biological weapons lab in Wuhan, China. Other theories say that it originated in a wet market from Chinese people eating pangolin, a type of ant eater, or from humans eating bats or from humans eating pangolin which had eaten bats. Regardless of which of the three proves to be true, it seems clear that coronavirus started in Wuhan, China. Additionally, it is generally accepted that had the Chinese government acted earlier to inform the WHO, CDC, and even local Chinese health authorities, countless lives could have been saved. Instead, researchers have pieced together a long trail of deceit and coverups which allowed the virus to not only ravage China, but to be transported to other countries, causing a global pandemic.

The coronavirus pandemic has caused many to wonder, just how vulnerable is the US to China both economically and in terms of shortages. China is the second largest supplier of pharmaceutical drugs to the US, with 80% of the active pharmaceutical ingredients (API) in US drugs coming from either China or India, as well as 90% of generic drugs. And fear arose that with factories shut down in China, there would be a shortage of life-saving prescription medications in the US. US technology companies are dependent on China for up to 50% of their parts and equipment. The auto industry depends on China for about 15% of its parts (PBS NewsHour, 2020). In January and February, when Chinese factories closed, those components were no longer exported and work in other countries, particularly the US, had to slow down or even stop because of the lack of Chinese-made components and inputs.

Article 36 of the Constitution of the People's Republic of China of 1982 specifies that citizens have religious freedom, however, that freedom only extends to so called “normal religious activities,” which means only religious organizations recognized by the CCP.

In 2019, of the 156 Chinese companies listed on the three major US exchanges, 11 were directly state-owned. How many of the others had state-controlled actors as majority shareholders was difficult to determine. Fifty of the firms were not included in the Public Company Accounting Oversight Board’s (PCAOB) 2018 review of non-US companies, because PCAOB were denied access. And these figures only accounts for companies based in Mainland China. They do not include Chinese companies, whether state or private, based out of Hong Kong or other offshore locations.

In previous reports I have discussed how China exports its censorship abroad, bullying foreign academia, educational institutions, and think tanks to self-censor and/or to promote a pro-Beijing agenda. Beijing also harnesses the power of its own state-run media, academic institutions and think tanks to increase its foreign influence. Much of their infiltration in foreign governments is simply to establish relationships or dependencies with internal power brokers who can champion pro-Beijing legislation in foreign countries. And this is all in spite of China’s much-repeated policy of non-interference in the domestic affairs of other countries (Office of the US Secretary of Defense, 2019).

There are around 700 Chinese companies in America’s stock and bond or capital markets. China has about 86 companies listed on the New York Stock Exchange, about 62 in the NASDAQ, and over 500 in over-the-counter market” (Robinson, 2019). By allowing China access to US capital and trade markets, the US is funding the CCP.

Facebook, Twitter, Youtube, Instagram and all Google sites and applications including Gmail are blocked in China. This includes that I’m not a robot Captcha that you have to click to access some websites. That captcha is often powered by Google, so, although the site may be allowed in China, you can’t actually use it because you can’t complete the captcha. And yet, when you talk about freedoms in China, the pro-government side will point at the Chinese constitution which is not terribly different from the US constitution and say, “We, have freedom of religion, freedom of speech, freedom of the press.” And on and on.

Article 7 of China’s National Intelligence law, says: “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law,” adding that the state “protects” any individual and organization that aids it.

This basically means that every Chinese company and every Chinese citizen is obligated to spy for China.

China is exporting their censorship to the US and other foreign universities, while creating an army of spies within academia who steal secrets, commit IP theft, report on dissenters, commit espionage and otherwise advance the programs and goals of the Chinese Communist Party. And sadly, many of them are US citizens.

Press freedom in China is fourth from the bottom, a subject I covered in a previous video called Press Freedom in China. Academic freedom in China is similarly poor.
In December 2019, Reuters reported that one of China’s top universities, Fudan, had altered its charter dropping the phrase “freedom of thought” and adding a pledge to follow the Communist Party’s leadership. Other amendments to the charter said that Fudan’s “party committee is the core of the university” suggesting that Party control of the university would become even more stringent than it had always been (Reuters, 2019).

The US-China trade war has weakened the Chinese economy, while protests and a consequent crackdown have wrecked the economies of Xinjiang and Hong Kong. The creation of US Space Force may draw China into an expensive arms race. Domestically, non-performing loans are increasing as provincial governments and Central government are planning massive bond issues, driving the country deeper into debt.

Mongolia is an extremely small country caught between two of the worlds largest and most powerful nations, China and Russia. Over the past hundred years, the art of maintaining an independent Mongolia has consisted of balancing ties between the two goliaths and playing one against the other. Having said that, joining an organization controlled by China but dominated by both Russia and China introduces a strange wrinkle into this power dynamic. Additionally, friendship with US, Japan and Korea have helped to counter balance the two goliath neighbors. As the US is Mongolia’s best third-neighbor and US ally, Japan is a top third-neighbor, would it make sense for Mongolia to join an organization at odds with American interests and values?

Mongolia’s capital markets are still in the earliest stages of development. Banks dominate the financial sector, with the stock market and bond issues accounting for only a small percentage of financing for the largest companies. Small to medium size enterprises, which provide about half of the country’s jobs, find it extremely difficult to obtain financing and when they do, the loan interest rates are exorbitant. Bankers explain that the loan interest rates are high because savings interest rates have to be high to compensate for inflation and for a devaluating Togrog. Unable to obtain financing through traditional channels, both small businesses and individuals turn to the shadow banking sector, where pension loans, salary loans and pawn shops charge incredibly high interest rates. If Mongolia were able to diversify its financial markets, providing reasonably priced lending to small and medium sized companies, they may be able to create more and better jobs, which would help relieve common citizens of the need to patronize the shadow banking sector.

A 2015 Romanian-British documentary, “Chuck Norris vs Communism” explains how the illegal importation of American action films on VHS cassettes to Romania gave people courage and hope, eventually leading to revolution against dictator Nicolae Ceaușescu. And while weaker brands have caved, Chuck Norris, Rambo, Rocky and 1980 US hockey team all took on and defeated communism. But who would have predicted that the latest movement in the struggle for democracy would be led by an irreverent American cartoon?

The 50 developing countries which have joined China’s Belt and Road Initiative (BRI) now owe an average of 15% of their GDP to China. The money that is loaned to these countries comes largely from two sources, the China Development Bank and Export-Import Bank of China, both of which are state owned (Weizent, 2019). The basic model for BRI financing is that a Chinese state-owned bank loans money to a developing country, at interest, to finance infrastructure construction, such as building new highways or high-speed rails. Most of the construction is carried out by Chinese companies, with materials purchased from China. This means that China effectively gets all of the money back almost immediately, but then the debt payments begin. When countries find it difficult to make their loan payments they reach out to the US or EU, or international organizations such as the International Monetary Fund (IMF) or World Bank. If debt relief aid is given, these international organizations would effectively be putting money in the pockets of China’s Communist Party.

Many in the West, from universities to technology companies, to countries in need of infrastructure investment have allowed themselves to be blinded by financial concerns and have accepted behavior from China which they would never have accepted from Germany, Canada, or even Libya. The short-term profits earned by technology companies, selling their products in China, are far outweighed by the hundreds of billions of dollars in stolen IP over the past two decades. The potential threat posed by the network of Confucius Institutes across the free world is not compensated for by an inexpensive expansion of a university’s foreign language department. The damage done to national security from data hacks by People’s Liberation Army Unit 61398 and other actors indirect cooperation with the Chinese government should be proof that China is not a benevolent force, dedicated to saving the world.

In spite of what some believe, it is not the US taxpayers that are bearing the brunt of the US-Chin tariffs, but rather Chinese companies. Economic modelling has determined that a 25% increase in tariffs increases the retail price of affected items in the US by only an average of 4.5%. President Trump has largely levied tariffs on consumer goods which have high elasticity, meaning that a small increase in price results in a large decrease in demand, or in this case, a large decrease in the quantity imported. Consequently, a 4.5% increase in consumer price in the US results in 75% of the tariff burden being placed on the Chinese manufacturer and a 37% decrease in importation of these goods. Moreover, the 2018 tariffs alone would result in $22.5 billion of revenue to the US government. This is money which is then redistributed throughout the economy through government spending (Zoller-Rydzek and Felbermayr, 2018).

Mongolia is a developing country which has made tremendous strides over the past twenty years. Unfortunately, there are still a number of health issues which are causing large numbers of unnecessary deaths. These include: respiratory illness from burning coal, infectious disease, lack of sewage treatment and clean drinking water, and lack of health education. There is much that NGOs and aid organization can do to alleviate these problems, particularly if projects are undertaken in cooperation with the government, which has the power to make changes at the policy level.

In America, people would consider access to education as a basic human right, a sentiment echoed by the United Nations (United Nations, n.d.). Sadly, worldwide, it is estimated that 72 million primary school aged children do not have access to education (Humanium, n.d). The reasons why not all children have access to education for a number of various reasons, such as restrictions on gender or ethnicity. In Mongolia, where I work, while every child has a legal right to attend government schools, the reality is that many cannot, and the primary reason is economic. This paper will briefly explore how a decline in economic growth has reduced government spending on education in Mongolia and how familial poverty keeps many children from attending school.

Milton Friedman famously said that raising tariffs and engaging in a trade war to balance trade was akin to shooting holes in the bottom of a boat, which both you and your opponent are sitting in. And while the Nobel Prize-winning economist’s mathematical analysis of trade is beyond reproach, the goal of the trade war is not necessarily to balance trade with China. To be fair, President Trump has ranted about China as a currency manipulator and about wanting to reduce the trade deficit with China, but he has also complained about the real issues, the same issues which various voices in the US government and business community have been warning about for years. These include, demanding fair and reciprocal trade, fair and reciprocal market access and about curbing China’s military expansion and hegemonic policies aimed at increasing China’s global power and control. I have published numerous papers on the need for fair and reciprocal trade and market access. This paper will largely focus on China’s global power expansionist and militaristic policies. By negatively impacting China’s economy, the tariffs can slow China’s expansion, which is largely fueled through trade. Additionally, it is hoped that if the Chinese economic growth is sufficiently threatened, Beijing would be willing to come to the table and negotiate fairer terms for US trade and market access.

The Mongolian economy fell into crisis, after the collapse of Soviet Union. With no support from the former USSR, the 1990s was one of the darkest times in Mongolian history with economic, educational, and health indicators hitting rock bottom. Over the past decade, the country has made tremendous progress, but the areas of education and health still need a great deal of improvement.

"Mongolia has recently topped lists as one of the world’s fastest growing economies, holding a massive wealth of mineral resources. With an outward-looking professional business community,
democratic government and rapidly improving living conditions, many international investors are turning their attention to this previously overlooked corner of Asia" (KPMG, 2016).

Many see the US-China trade war as a US effort to curb China’s global economic expansion and rise to world dominance, including such issues as; The Belt and Road Initiative, the debt slavery of most of the developing world, claims on the South China Sea, the independence of Taiwan, and perhaps even the continued semi-autonomy of Hong Kong. 
Irrespective of geopolitical factors, the United States has a number of very real, very tangible economic grievances with China. Even under previous administrations, the US has brought suit against China in the World Trade Organization, but, the same complaints raised by President Obama remain unresolved.

Media reports speak of China's "China's 'nuclear currency option' in the trade war" It would be more accurate to refer to this as China's nuclear currency non-option. The nuclear option which the media are referring to is that China could sell-off all of the US debt they hold in reserve. China has close to $3 Trillion in hard currency reserves, one-third of which is in US dollars and dollar equivalent government debt instruments such as T-Bills (Campbell, 2019). The doomsayers claim if China sold off all of this currency at once, it would depreciate the dollar and wreak havoc with the US economy. This is not consistent with experience, however, as in 2015, China dumped about $1 Trillion of US debt to finance its economic stimulus package and the Yuan still dropped against the dollar. The US dollar is the most traded currency in the world and on any given day more dollars are traded than China's total reserves. If China dropped the whole $1 Trillion in a single day, it would just be one heavy day of trading with very little impact on the price of the dollar. Keep in mind that there are nearly 200 countries recognized by the UN, as well as a number of other sovereign and semi-sovereign entities, which are all holding US dollars as the bulk of their currency reserves. In fact, China only holds about 5% of the total US debt (Investopedia, 2019). Dumping all of its US currency holdings would hurt China much more than the US. It would devalue the Yuan, threatening its status as an IMF Special Drawing Rights (SDR) currency. In order to remain in the SDR, the Yuan has to maintain a value within a certain band. If it fluctuates too wildly or drops too low, the Yuan would no longer be considered an option as an international currency. Selling off all of China's dollars would also scare off investors (Campbell, 2019). China is one of the world's largest recipients of foreign direct investment, but that would end if investors were seeing their returns paid in worthless paper. Whether through government manipulation, as Trump claims, or through fair market forces, the Yuan has been in a steady decline since Trump assumed the presidency. If the Yuan were no longer backed by US dollar reserve holdings, that would depress the value even further. Currently, if the Yuan drops below a level that Beijing finds acceptable, the Central government can go on world currency markets and trade dollars for Yuan until the price levels off. With no more dollars in reserve, the Central government would be unable to regulate the price of its own currency. One option might be for Beijing to sell dollars and buy Euros. This would not solve all of their problems, however. Commodities, energy, and raw materials, which China is one of the largest importers of, are largely priced and settled in US dollars. This would, once again, necessitate, China going on the open market and buying back expensive dollars, but with a greatly depreciated Yuan. In short, China would be selling low and buying high.

The Kingdom of Cambodia has made major strides in terms increasing the standard of living of the average citizen over the past two decades. The educational system, however, while vastly improved, still lags far behind international standards. According to PISA data, only 8% of Cambodian children achieve a minimum proficiency in reading and only 10% in mathematics (MoEYS, 2018). In terms of quality, Cambodia’s primary education ranked 112th out of 137 nations. The dearth of education has led to the country being plagued by an inadequately-educated workforce, which, after corruption, is cited as the second largest difficulty in doing business in Cambodia.” (Open Development Cambodia, 2018). In short, lack of education is keeping the country poor. There are many reasons for the low educational attainment, most of which are rooted in a lack of government funding, which is not necessarily a function of the government having too little money but rather how the government prioritizes its spending. This report will explore the various indicators related to educational attainment in Cambodia, followed by a look at the funding and the cost of improvement.

How many immigrants does the US need? This question has a very straight forward and mathematical answer. For a country to maintain healthy GDP growth, the birth rate has to be at replacement level, which means each couple must have a minimum of 2.1 children. If this level is not maintained, you wind up with too many old people and not enough working age people. The economy is stronger if you have more working age people than old people. Working people pay more taxes and spend more money in general than old people. Working people buy and maintain homes, raise children, buy toys and clothes and groceries for a family, buy cars, pay for college and invest and save for retirement. The retirement savings of working people give the banks capital which they can lend to other young people who tend to start businesses and construction projects more frequently than senior citizens. Old people spend little and draw from the system in terms of social security and medical benefits. Old people who self-funded their retirement draw down on their savings, decreasing the amount of money invested in the stock market or held in banks for loans. Additionally, the strength of the US is and always has been innovation. Historically, the US has been one of the most innovative countries, producing inventions which revolutionize how things are done around the globe. This innovation has lead to the US becoming the richest country on Earth. But innovation is the field of the young. Old people do not innovate. Therefore, to have a healthy economy you need more young people and less old people. The quality of life for citizens is better when the economy is strong because the government can afford to do things like pay social security and medical, as well as repair and build infrastructure and pay government and rescue services, such as police and fire. An ageing population, by contrast, eventually causes the economic growth to slow which reduces jobs, which reduces tax revenue. A decrease in innovation reduces high end jobs, which reduces opportunity for young people while reducing their contribution to GDP. It is a vicious cycle.

This paper will discuss several of the various definitions of terrorism employed by courts and authorities around the world. Next, it will analyze several mass casualty incidents within the context of the Academic Consensus Definition of Terrorism, to determine if the attacks qualify as acts of terrorism. The intent of this paper is to empower the public, by making this analysis tool available so that citizen may apply similar analysis to future mass casualty incidents to determine if they constitute acts of terrorism.

This report has been written in order to provide an overview of the country, economy and education of Sri Lanka to assist the incoming dean of a joint venture educational institution in understanding the competitive environment. It begins with a look at the people and demographics, next, the economic indicators are analyzed, a brief description of the educational system follows, including a list of private educational institutions, finally, and most importantly is a detailed description of the various foreign/joint venture and pathway educational programs in the country.

In negotiations, it seems that China is willing to make concessions to the US, but it is unclear, however, which concessions and how much the Chinese are willing to yield. Regardless of the exact terms, it is presumed that the US should walk away with a better trade deal than they had in the past. Certainly, President Trump would not accept a worse deal, and it seems unlikely that China would even put a worse deal on the table. So, the only logical outcome would be a better deal for the US, but better how and by how much remains to be seen. Given the personality of President Trump, it seems likely the Chinese would have to offer a significantly better deal to induce him to drop the US tariffs on Chinese imports.

The French yellow vest protestors are threatening to cause a run on the bank and some pro-bitcoin voices are using this as proof of why bitcoin is better than fiat currency.
Bitcoin adherents seem to believe that one couldn’t have a run on the bank if the world used bitcoin, rather than fiat currency. After reading countless bitcoin articles and publishing numerous papers, no one has been able to explain; If in a bitcoin world there would still be credit. And if there was no credit, how would people buy houses and cars? If there was credit, then it seems there would be banks. And if there were banks, the banks would take deposits while loaning out the bulk of the bitcoins at interest, in which case, you would still have a fractional reserve system as we have now. So, it is unclear how a fractional reserve system based on bitcoin would be superior to one based on fiat currency.

It is a common misconception that the US is the most obese nation on Earth. Some people believe that sports participation among American young people is declining or even non-existent. Another commonly held belief is that Americans do not play soccer. Finally, US obesity rates are often attributed to a lack of exercise or sports activity among adults who become inactive at a younger age than adults in other countries. This article will demonstrate that all of these beliefs are false. According to World Atlas, Nauru holds the position as world's most obese nation. The US comes in12th, with an obesity rate (including both obese and overweight) of roughly 36.5%.1 To put this number in perspective, Europe as a whole has an obesity rate of over 20%.2 Other middle-and high-income countries are between 25% and 30%, such as: Turkey,

The US and China stand on the brink of a trade war, with each side raising tariffs against each other’s imports. President Trump sees the levying of import tariffs as a mechanism for addressing a number of US business concerns regarding China trade. Many economists, on both sides of the trade dispute, are determined to predict, by way of economic models, which side of the trade dispute could wind up the winner and which would be the loser. This paper will analyze several of these models and the corresponding research reports. Finally, this paper will examine several Game Theory/Nash Equilibrium analysis of free trade versus tariffs to determine the optimization point for both the US and China.

The current round of tariffs by President Trump against China are just the latest actions in a long series trade disputes between the US and China.
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In April 2017, President Trump launched an investigation into steel imports. In August 2017, he commissioned a Section 301 investigation into possible Chinese intellectual property violations. In January 2018, he levied a 30% tariff on imported solar panels as well as a 20% tax on large residential washing machines. In February 2018, the Commerce Department proposed a 24% tariff on steel and 7.7% on aluminum. On March 9, 2018 President Trump proposed a 25% tariff on steel and 10% on aluminum imports.  The US is not the only country to have charged China with violations of anti-dumping laws. Both steel and aluminum are industries where supply exceeds demand in China. Consequently,  China’s trading partners, such as the EU have similarly complained that China is exporting at sub market prices, making it difficult for foreign firms to compete.

Many people believe that loans/credit/debt and fractional reserve banking create money. While widely believed, this is simply not true. Loans/credit simply shifts future consumption to the present. Some economists have defined loans/credit as a claim on future labor. The idea being, a consumer can borrow today in order to spend more than he currently has. The loan will then be paid back, generally with interest, from his future earnings. At every step in this transaction, the sheets will balance. There will never be a point in this transaction where money is created.

Donald Trump has announced that he has instructed U.S. Trade Representative (USTR) Robert Lighthizer to raise at least $50 billion in tariffs against imports from China. Among these tariffs will be a 25% duty assessed on certain products imported from China such as aerospace, information and communication technology, and machinery. The president has said that additional tariffs will be coming, and that when all is said and done, the tariffs may reach as high as $60 billion.  A new list of tariffs is expected to be released by the office of the USTR within 15 days. Experts believe the next round of tariffs will be applied to robotics, hi-tech trains and aerospace.  The president stated that the US was in positive negotiations with world leaders. He also stated “This is the first of many” tariffs and actions.

The immediate Chinese response was that China does not fear a trade war with the US and that China would retaliate with $3 billion of tariffs on imports from the U.S, including pork imports, recycled aluminum, steel pipes, fruit and wine. China has also stated that they will pursue legal action against the U.S. at the World Trade Organization.  Li Yong, senior fellow of China Association of International Trade, has called Trump’s move the start of a trade war.

The China Pakistan Economic Corridor, (CPEC) which runs from China’s northwestern Xinjiang Province to Pakistan’s Gwadar Port, on the Arabian Sea, is considered to be the flagship of China’s modern Silk Road project.  Formerly called One Belt One Road (OBOR), the project is now called the Belt and Road Initiative (BRI) and was unveiled by President Xi Jinping in 2015. Not only is the BRI the brain child of President Xi, the most powerful Chinese leader since Mao, but the BRI like Xi Jinping Thought, has actually been added to the Chinese constitution, meaning it is beyond criticism. In short, both the BRI and CPEC are happening.

Supporters of gold or bitcoin as a replacement for our current fiat currency system often make similar arguments. They frequently claim that fiat currency supporters believe that credit creates money, because you are spending money which you do not have. While I cannot speak to what people believe or do not believe. I can say that credit does not create money and here is an illustration.

Overstock, an online retailer which sells home furnishing, is one of the few large retailers which claims to accept bitcoin. All of their goods are, however, priced in US dollars. Apparently, until 2017, the company liquidated 90% of bitcoin received and converted it to dollars. In 2017, the company adopted a new strategy of only liquidating half of the bitcoin  received for US dollars.  Only a small percentage of the company’s totals sales is conducted in bitcoin, and only a percentage of those sales are not instantly converted to dollars. Therefore, if the company is pricing their merchandise in dollars, and selling the overwhelming majority of goods for dollars, and converting bitcoin to dollars, does this really support the notion that bitcoin is currency? It would seem that this supports the position that bitcoin is an asset, like shares of stock or collectible baseball cards. Shares and baseball cards could also be sold for dollars which are then used to make purchases, but would not themselves be considered currency.

The Mongolian economy fell into crisis, after the collapse of Soviet Union. With no support from the former USSR, the 1990s was one of the darkest times in Mongolian history with economic, educational, and health indicators hitting rock bottom. Over the past decade, the country has made tremendous progress, but the areas of education and health still need a great deal of improvement.

Today, Shenzhen Special Economic Zone is arguably the world’s most well-known and most successful special economic zone (SEZ). However, the phenomenon of special economic zones is neither new nor limited to China. The first modern special economic zone was established in New York, in 1937. In 1942, a special economic zone was established in the US territory of Puerto Rico. A modern free-trade zone was established at Shannon airport, Ireland, in 1959 (Pakdeenurit 2014 and The Economist 2015). SEZ were established in Iceland and Taiwan in 1960. In 1980, India established the “Export Processing Zone”. And the Shenzhen Special Economic Zone was established in 1980 (Pakdeenurit 2014).
This paper will examine various forms of SEZ and their history. Next, it will analyze global SEZs and see why some are successful while others fail. And finally, it will look at Chinese SEZ, including Chinese overseas SEZ.

Shanghai’s traffic, while an annoyance for anyone who is late for work, represents billions of dollars of economic activity, which helps drive the city’s economy. In the private sector, the sale and maintenance of those 2 million cars, combined with the sales of petrol and insurance, provide hundreds-of-thousands of much-needed jobs. Private sector taxis and car services are another related activity which provide a living to countless drivers and support staff. On the government side, licensing and registration represents an ongoing stream of income. And finally, the need to move people from point A to point B results in the government investing billions, upon billions of dollars in transportation infrastructure construction. This money, part of the government’s ongoing fiscal policy stimulus initiatives, goes immediately into circulation paying wages to construction workers, tradesmen and builders.

The Shanghai traffic may seem like it’s slowing the city down, but in actuality, it is speeding up the city’s development.

The term “political economy” could be used to describe any country’s economy, but in China this name is even more appropriate than elsewhere. Although the country began to move from a planned economy to a market economy nearly 40 years ago, the government still has a great deal of influence over the direction and pace of development. Presidential terms in China are ten years, and each successive decade has brought new waves of economic reform, while maintaining government control on significant sectors of the economy.

As China develops economically and expands its interests further and further beyond its borders, the increased need for energy forces China into the Gulf Region where its Middle East policy places right in the center of global affairs. China’s relationship with Middle East nations is closely related to its relationship with the US and its engagement with the world community.

One Belt One Road (OBOR) The New Silk Road is intended to strengthen ties and increase trade between Europe and China which have already grown 168 percent over the last ten years (Puls 2015). Other goals include: strengthening policy communication, increasing economic and monetary cooperation, eliminating trade barriers, and improving transportation from the Pacific to the Baltic Sea, from Central Asia to the Indian Ocean, and eventually eastern, to western and southern Asia (Szczudlik-Tatar 2013).

Chinese media predict that OBOR will eventually involve two-thirds of the world’s population and account for one-third of global GDP (Johnson 2016).

China’s market-oriented economic reforms began in 1978, with the Third Plenary Session of the 11th Communist Party of China (CPC) Central Committee under the leadership of Deng Xiaoping (DaCosta and Carroll n.d.). Around this time, the 1970s and early 1980s, the decollectivization of agriculture began (Xu 2013). The decollectivization of farms not only increased yields and improved nutrition in the villages, but also freed up much of the farm labor to move to other, money making, sectors of the economy. As a result, this shift in labor marked the birth of the Township and Village Enterprises (TVEs), in Chinese, "xiangzhen qiye". From 1978 to 1994, TVEs grew at an average rate of about 27%, and by 1987 rural industry actually surpassed agriculture (Wei 2003). The TVEs grew in both size and importance until the mid 1990s, when, for a variety of reason, they fell into decline.

In 2001, 41% of Chinese lived in poverty, by 2011, that number had dropped to only 12% (Kochhar, R. 2015). Over the same ten year period, China's middle class grew by 203 million (South China Morning Post 2015). The growth of the middle class in China and the rest of Asia is of great importance to the entire world economy. In fact, the World Economic Forum (WEF) chose the growth of Asia's middle class as the eighth most significant global trend in 2012 (He 2013). These sentiments were echoed in a 2011 Brookings Institute report (Kharas 2011).

Since 1980 the average Chinese has seen his income multiplied ten times over. Even more incredibly, as recently as 2000 the average annual income in China was only $760 (Censky 2012). According to the International Monetary Fund (IMF), between 2001 and 2011, China’s middle class jumped from 3% to 18% of the population. Additionally, the upper-middle income segment increased from below 1% to 5% (Kochhar, R. 2015). Kochhar also states that the Chinese middle class have average income ranging from $14,600 to $29,200 for a family of four (Kochhar, R, 2015).  This report, however, will not define the middle class in terms of dollars, which can mean very little in the absence of a full analysis of the cost of living. Instead it will use the definition put forth by Luhby (2012), who identifies the middle class as those with discretionary income equal to one third of their income. By this definition, China is now home to the world’s largest middle class (Sinha 2014).

In 2001, 41% of Chinese lived in poverty, by 2011, that number had dropped to only 12% (Kochhar, R. 2015). Over the same ten year period, China's middle class grew by 203 million (South China Morning Post 2015). The growth of the middle class in China and the rest of Asia is of great importance to the entire world economy. In fact, the World Economic Forum (WEF) chose the growth of Asia's middle class as the eighth most significant global trend in 2012 (He 2013). These sentiments were echoed in a 2011 Brookings Institute report (Kharas 2011).

“Beijing cannot keep burning through reserves at a record pace to defend the yuan and at the same time loosen monetary policy. It has to choose” (Evans-Pritchard 2016).

It seems that the Chinese government’s current strategy for propping up both the domestic stock market and the nation’s currency is to avoid capital flight, by making it difficult for citizens to take money out of the country.

“Beijing cannot keep burning through reserves at a record pace to defend the yuan and at the same time loosen monetary policy. It has to choose” (Evans-Pritchard 2016).

It seems that the Chinese government’s current strategy for propping up both the domestic stock market and the nation’s currency is to avoid capital flight, by making it difficult for citizens to take money out of the country.

“Beijing cannot keep burning through reserves at a record pace to defend the yuan and at the same time loosen monetary policy. It has to choose” (Evans-Pritchard 2016).

It seems that the Chinese government’s current strategy for propping up both the domestic stock market and the nation’s currency is to avoid capital flight, by making it difficult for citizens to take money out of the country.

The efficient use of government money can be defined as obtaining the most value for the money spent (EU Public Admin n.d.). Additionally the efficient spending of public money should result in the greatest quantity of benefits to the citizenry. The China government budget for 2015 was $258 billion (Hua et al. 2015). And approximately 13% of China’s GDP is government spending (Worldbank.org 2015). To put this number in perspective, US government spending accounts for roughly 33% of US GDP (Usgovernmentspending.com 2016). China’s government budget comes from a combination of sources, including income tax, corporate taxes and fees paid to the government. Income taxes are one of the most common transfers from ordinary citizens to their government and the one which concerns most people. China has a graduated personal income tax rate which ranges from 3-45%. (Hoffman 2015). The US has a much lower maximum income tax rate, with US rates ranging from 10-28% (Efile.com). To see how efficiently this money is spent it will be necessary to examine what the money was spent on.