Help is on its way to the U.S. auto industry. President Bush announced this morning that Detroit will get federal emergency funding of up to $17.4 billion in return for “an extensive restructuring of its outstanding debt and labor costs over the coming year.” $17.4 billion are loans, and if the Big Three are not able to provide coherent restructuring plans by March 31, 2009—the loans will be called in. Funds for the loans will come from the Troubled Asset Relief Program (TARP) initially set up to aid the financial industry, with $13.4 billion available now and an additional four billion available in February. The timing works very well for the outgoing Administration, since they will not be responsible for making the decision whether or not the automakers complied with the terms of the agreement comes March. In the meantime, they have saved the day for GM and Chrysler (Ford said that it did not need the federal money at this time). Also, this gives the Administration a convenient bridge to request the second half of the $700 billion TARP package. Secretary Paulson issued a statement urging Congress to release the remaining $350 billion on the morning of President Bush’s announcement of the federal aid to the automakers. The loan package for the automakers released today has another $4 billion contingent on “drawing down the second tranche of TARP funds,” according to a White House statement. Previously, the chairmen of the House and Senate committees have stated their reluctance to entrust the second half of the rescue money to the Bush Administration and significant opposition to the idea remains among the members of Congress. Yesterday, Chinese government celebrated a 30-year anniversary since the beginning of the reforms that made China’s economy a global force to be reckoned with. In 1978, Deng Xiaoping spearheaded market reforms that would encourage export-led economic growth in China. The reality became clear 30 years later: even though the Chinese society has made great strides in its economic development, it is solely dependent on consumers in Europe and the U.S (China’s number 1 and number 2 export markets) to finance this development. Current economic crisis has exposed the global system that generated unsustainable levels of debt, and ultimately showed that China’s rapid economic growth, averaging 10% a year is unsustainable, too. The overseas consumers can’t afford to finance it any longer and the Chinese themselves are not able to spend their money in the absence of a social safety net providing for retirement, health care and education for their children.