John Foley is Reuters Breakingviews' China editor. Based in Beijing, he writes on China’s economy and financial markets. John established Breakingviews’ Hong Kong bureau in 2009, and previously wrote on mergers and acquisitions, capital markets and consumer goods in London. Before joining Breakingviews in 2004, John worked as a copywriter for a London-based advertising agency. John read English Literature at Exeter College, Oxford. Follow John on Twitter @johnsfoley
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Property investment is slowing sharply, dragging GDP and commodity prices with it. So far, China’s planners have mostly stood by. Letting market forces operate could bring financial disruption. But unwinding the massive oversupply of hastily-built housing has to start somewhere.
Homebuyers will still spend if prices and financing are attractive. But property companies are selling more for less, which beats down their margins. If a pick-up comes at the expense of profitability, things will continue to get worse for Chinese housebuilders.
China’s first home-grown investment bank may lose some political stature without the son of ex-Premier Zhu Rongji at the helm. An IPO may have to wait. But things were already glum before Levin Zhu checked out. A new CEO may actually make CICC more appealing for outsiders.
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