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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The chairman of Dalian Wanda, a Chinese conglomerate, liked Sunseeker’s yachts so much he bought the company. Liquidity is ample and China’s super-rich are doing fine. But as the economy slows, showy displays of inequality and flashy deployment of capital are disconcerting.
Mengniu’s $1.6 billion bid for Yashili gives the target’s founding clan the chance to cozy up to a national champion, and buyout firm Carlyle a good return. Other investors are less fortunate - they will be selling for less than Yashili’s IPO price just three years ago.
Soaring interbank rates should be a fitting punishment for lenders which lent too freely and unwisely. But if allowed to persist, the pain could spread beyond banks to corporate and government borrowers - and the economy. It is unlikely China’s leaders have the stomach for that.
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