Stricken Hanergy drops investors into black hole 1 Mar 2019 The solar company wants shareholders to swap frozen shares for stock in a vehicle which may or may not relist in China. Hanergy might well be ejected from the Hong Kong exchange before trading resumes, denying them an alternative. This raw deal would set a terrible precedent.
The yuan belongs in a U.S.-China trade pact 1 Mar 2019 Washington might ask Beijing to formally pledge not to devalue its currency. China says a weaker yuan is not in its interests, which might be true. But past manipulation distorted the U.S. economy, and could happen again. A deal without a currency clause will be flawed.
Viewsroom: Warren Buffett eats crow 28 Feb 2019 Kraft Heinz’s poor earnings, $15 bln writedown and accounting investigation forced the Berkshire Hathaway boss to admit he overpaid for the nuts-to-Velveeta cheese purveyor. Breakingviews columnists discuss what went wrong. Plus: Trump buys more time in his China trade spat.
Universal Music auction could end on bum note 28 Feb 2019 Buyout group KKR and China’s Tencent may bid for part of Vivendi’s label, Reuters reports. On paper it’s the best way to gain exposure to fast-growing streaming. That means getting emerging market fans to pay for music. Investing alongside Vincent Bolloré also brings risks.
JD’s winding road to profit keeps getting longer 28 Feb 2019 The Chinese e-commerce group’s sales rose by more than a fifth to top $20 bln in the fourth quarter. But heavy investment in new bets means JD is barely breaking even. Financial discipline would help, but may not be enough to counter cooling demand and competition from Alibaba.
Chinese shares deserve more room to run 26 Feb 2019 Cooling trade tensions helped push the 2019 rally in the benchmark mainland index to 24 pct. Easier credit and support from President Xi Jinping have been even bigger factors. Regulators are starting to worry as leverage grows. A clampdown, however, would do more harm than good.
Tech layoffs threaten middle-class China dream 26 Feb 2019 Reports of job cuts in the once-booming sector are on the rise. Officials touted jobs at startups as substitutes for slack hiring at state giants and traditional industries. But if 8 mln college students graduate into an innovation economy that isn’t hiring, unrest could result.
U.S. stocks daze Trump into folding on China 25 Feb 2019 The president says he will delay a tariff hike on $200 bln of Chinese goods. Tweets imply he will ease up on Huawei too. Wall Street wobbles have pushed the White House toward a quick-and-dirty deal which empowers Beijing hardliners, and benefits neither side in the long run.
China makes banks take a practice perp walk 25 Feb 2019 Officials want lenders to use perpetual bonds to boost capital buffers. Generating buyer interest is tough, so Beijing put a thumb on the scales to help sell the first $6 bln issue. State-incubated markets can work in China, but the trick is taking the training wheels off.
China coal curbs blow diplomatic smog Down Under 22 Feb 2019 At least one big port has put a lid on Australian imports, Reuters says. Beijing has used such tactics in the past to reduce stockpiles and support domestic prices. But denting a top export earner for Canberra will be seen as a message too, when ties are already under strain.
China’s trade problems go well beyond Trump 21 Feb 2019 Beijing hopes harsh terms in any tariff pact could be undone if the U.S. president loses re-election. But Democratic White House hopefuls like Sherrod Brown and Bernie Sanders are also tough on China. No matter who wins in 2020, bashing the People’s Republic is here to stay.
Man City’s long game in China can yield a win 21 Feb 2019 A consortium including the Manchester soccer club’s owner has acquired third-tier Sichuan Jiuniu FC. It's a modest punt, and the first by a Premier League heavyweight in the mainland game. Local allies and experience in multiple countries set the buyer up for financial success.
Lenovo’s reboot could run low on battery 21 Feb 2019 Quarterly pre-tax earnings more than doubled from a year earlier, confirming a turnaround at the world's top PC-maker. That's mostly powered by cost cuts in the $9 bln group's handset and server units. With demand cooling for both, this comeback may prove difficult to sustain.
U.S. soy farmers will suffer trade war shell shock 20 Feb 2019 Midwestern producers will place a bet on talks between Washington and Beijing, when planting begins. Even with a deal, they face stockpiles and fewer soy-eating pigs in China, after an outbreak of disease. Worse, the spat has taught their top buyer it can live without U.S. supply.
Everyone is right about China’s economy 20 Feb 2019 Stock markets are charging; bonds defaulting. Holiday spending was weak, but January exports boomed. State-owned companies, and contradictory industrial and monetary policies are muddying performance measures. They betray a growth engine driving in two directions at once.
Money can’t buy China’s chip industry much love 19 Feb 2019 Beijing may buy more U.S. semiconductors, a tacit admission of its $100 bln struggle to make advanced ones at home. Champions such as SMIC haven’t closed the gap with rivals. While distorting policies like Made in China 2025 draw fury, it’s an open question whether they work.
China’s big urban-zone idea lacks finer points 19 Feb 2019 Beijing unveiled a blueprint to link Hong Kong, Macau and mainland cities into a $1.5 trln economic powerhouse. The Greater Bay Area plan is packed with industrial-planning jargon. What’s missing is nitty-gritty on taxes, consumer banking and commuting, which will matter most.
Hong Kong’s China extradition experiment unnerves 18 Feb 2019 The territory is mulling a way to exchange suspects across the border. With over 1,000 mainland firms listed there, putting CEOs within reach of local courts makes sense. But Beijing’s reaction to U.S. attempts to extradite a Huawei executive suggests the channel might be abused.
UK throws drowning Huawei a European lifeline 18 Feb 2019 British intelligence says it can manage risks from using the Chinese giant’s kit to build ultra-fast 5G networks, the FT reports. It's the first major power to challenge a U.S. campaign against the telecoms group. Berlin or Paris could follow, keeping Huawei's ambitions afloat.
Ant steps around China tech backlash into Europe 15 Feb 2019 Jack Ma's $150 bln fintech group has snapped up UK payments outfit WorldFirst. The mooted $700 mln deal, coming a year after a failed bid for U.S.-based MoneyGram, revives Ant’s overseas push. But heightened European anxiety about China suggests future buys may not be so easy.