Assume the economy expands as briskly in the next 20 years as in the past decade. Its share of world GDP could top 35 percent, a Breakingviews calculator shows. A static workforce would have achieved heroic productivity gains. If it doesn’t, China’s slowdown has only just begun.
The U.S. cosmetics company’s Chinese subsidiary gave officials handbags, holidays and cash to access a huge market. The rationale: muddy markets make dirty hands. Avon has learned its lesson with a $135 mln fine. Elsewhere in China, the belief that bribery pays remains engrained.
The list of global banks deemed systemically important has hardly changed since 2011. But membership now comes with ever-larger capital requirements and increased regulatory meddling. In an attempt to escape, some lenders will decide to become smaller or less interconnected.
The government is cajoling banks to lend to the indebted airline, which really needs more equity. The lifeline just might prevent a repeat of Kingfisher’s high-profile failure. But high fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.
The Chinese web giant is already behind rivals Alibaba and Tencent in mobile taxi-apps. Strategically the tie-up looks like a coup. But without financial terms, investors are left in the dark. Uber’s controversial track record and Baidu’s shrinking margins add to the uncertainty.
Even with a slowing economy the People’s Republic offers lots of growth for home-grown corporations. Hostile regulators, stronger rivals, and cultural differences discourage foreign expansion. Though some will take the plunge anyway, in most cases overseas growth can wait.
The U.S. buyout firm is backing a $219 million capital raising by the Chinese sports brand it has failed to revive in almost three years. The cash will help. But if TPG really wanted to show confidence, it would team up with the company’s founder and take Li Ning private.