Foreign currency reserves shrank by $513 bln last year, reversing two decades of cash flooding in. The decline has spooked global markets, put pressure on the yuan and prompted a renewed rush for the exits. Breakingviews looks at the causes and consequences of the exodus.
State-backed Beijing Enterprises is buying Germany’s Energy from Waste for $1.6 bln. Unlike some of China’s splashier foreign deals, this looks decently priced and makes obvious strategic sense. China badly needs more clean-technology expertise. Expect more trashy buys.
The ailing electronics firm is leaning towards a deal with Taiwan’s Foxconn over a domestic bailout. Sharp’s current shareholders may yet suffer. But at least the board seems to be taking its duties to them seriously - just as should happen in the new investor-friendly Japan.
Thailand’s True Corp is raising $1.7 bln in its second share issue in as many years. That will help pay for spectrum and trim debt as competition heats up. But True shares are expensive. Without Chinese backing, investors might be wary of tycoon Dhanin Chearavanont’s moves.
The activist fund is pushing for a sale of Bank of East Asia. Other big shareholders are unlikely to join in. It’s also a bad time to seek a buyer for a group with such a large exposure to China. Elliott’s latest salvo suggests it’s getting nervous about its $500 mln bet.
Buying Syngenta will thaw China’s hostility towards genetically modified organisms. Nationalist fears about food safety will ring hollow once the seeds are in Chinese hands. The buyer will be able to push into a huge new market – but so, in time, will rivals like Monsanto.
The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.