Gift coupons could sweeten Japan’s sales tax pill 30 Jul 2013 A plan to double the country’s consumption tax is crucial to convince bondholders that public debt won’t spiral out of control. But the increased levy risks undermining Japan’s economic revival. Shopping vouchers would make the shift more palatable to consumers.
Alibaba may be worth $100 bln – but not to Yahoo 29 Jul 2013 The U.S. internet group’s 24 pct stake in China’s biggest online retailer may be worth as much as all Yahoo’s booked assets, but investors shouldn’t bank on anything near that. Alibaba’s interests are unlikely to match Yahoo’s, and the Chinese company holds most of the cards.
Nomura surge not all Abenomics 26 Jul 2013 New management deserves credit for a year of cost cuts, but the Japanese investment bank has certainly been helped by the huge monetary and fiscal stimulus in its home market. With such favourable tailwinds, it’s too early to tell whether Nomura is truly a changed beast.
China’s next reform: more central planning 26 Jul 2013 The central government wants to cut excess capacity in basic industries by telling 1,400 companies to shut factories. It has to overcome the free-market instincts of local governments and entrepreneurs. But if the plan works, China will be more efficient - and less polluted.
India seeks diaspora bailout without strings 26 Jul 2013 For the fourth time in 22 years, India may ask its expats in other countries for a rescue loan. The practice has its uses. Jewish emigrants have been a cheaper source of financing for Israel than global bond markets. And lenders won’t demand IMF-type fiscal austerity.
Baidu digs deeper trench in China’s mobile wars 25 Jul 2013 More than 10 pct of the search engine’s revenue now comes from mobile. Google and Facebook show how heavy investments can pay off over time. Yet the cost is high and margins get squeezed. In China, competitive lines are more blurred. Returns may be even longer in coming.
Patents hoarders aim for bigger slice of Apple pie 24 Jul 2013 Hon Hai earns a crust making iPhones and the like for brands that reap hefty rewards further up the supply chain. While sales are growing, manufacturers must fight workers, brand owners and consumers for a bigger share of value. Patents may be a way to wrestle something back.
Big pharma’s Chinese dreams: bruised, not broken 24 Jul 2013 China’s fast-growing drug market was meant to save foreign groups from patent expiries and western governments’ cutbacks. The GlaxoSmithKline bribery scandal may signal a new wave of price pressure and slower growth. But Beijing needs big pharma just as it in turn needs China.
New-age trade clubs: A guide for the perplexed 24 Jul 2013 With the Trans-Pacific Partnership, global trade is going private. Japan has joined economies as diverse as the United States and Vietnam in drawing up a new accord. It looks like fragmentation, but with sensible rules, the TPP could give the bigger WTO a new lease of life.
Time for victorious Abe to roll up shirtsleeves 22 Jul 2013 Turning on the money-printing tap was easy. But having won control of the upper house of Japan’s parliament, Prime Minister Shinzo Abe must now attend to the broken plumbing. Passing laws that make the economy more vibrant and public finances stronger are the priority.
G20 says in Moscow that tax evasion is really bad 22 Jul 2013 The world’s largest economies have agreed on a broad plan to fight multinational companies’ tax optimisation and evasion. The next step is to translate this into national laws. But Russia may not have been the best possible place to launch a global push for tax fairness.
China’s tech hopefuls still prefer US dollars 22 Jul 2013 Yuan venture capital is growing, but foreign funding still rules. Despite the red tape, a lack of domestic exit options means entrepreneurs are following giants like Baidu and Tencent offshore. As long as a Nasdaq listing retains its allure, the greenback will continue to reign.
China’s PBOC serves reformists an amuse-bouche 19 Jul 2013 The central bank has allowed banks to lend as cheaply as they like. That smells like liberalisation, but it’s no more than a tasty morsel. Banks could even end up weaker, if rates fall for well-connected borrowers. The real meat, relaxing deposit rates, is still off the menu.
Review: The rise and fall of an Asian tycoon 19 Jul 2013 Mohsin Hamid understands corruption: his fictional portrait of a crooked yet oddly sympathetic tycoon shows how shady dealings can make or break a career. Hamid doesn’t condone skullduggery, but this detailed profile is an instructive guide to a darker side of rising Asia.
Vietnam is back in the game for buyout firms 18 Jul 2013 Warburg Pincus is investing $200 million in the country’s largest mall owner at a time when retail sales growth is at a 10-year low. The U.S. private equity firm’s punt might be premature, but it isn’t wrong. Vietnam is outgrowing its bad reputation with foreign capitalists.
Baidu deal shows pain of being China tech upstart 18 Jul 2013 After the search engine said it would buy app store 91 Wireless, the seller’s shares fell almost a quarter. As China’s tech giants fight for mobile market share, small players face pressure to compete or get out of the way. Both options can leave investors disappointed.
India new FDI rules show welcome long-termism 17 Jul 2013 Letting foreigners own more of local industries like telecoms won’t kick off a rush to invest. But it suggests a desire to court longer-term inflows, and replace an unhealthy reliance on hot money. The new policies may help stem the rupee’s slide too.
Billabong pays up for shelter from debt storm 17 Jul 2013 In return for saving the Australian surf brand from a potentially fatal debt crunch, private equity group Altamont gets a 12 pct coupon on loans and up to 40 percent of Billabong’s equity. Existing investors will see scant returns, but without this deal they could have been sunk.
GSK finds toxic side effects in Chinese market 16 Jul 2013 The UK pharma group is accused of using elaborate kickback schemes. But the Chinese combination of pervasive state involvement, underpaid doctors and coveted foreign products is almost an invitation for bad practice. A full cure requires time, money and stronger institutions.
India in depth: Time to treat savers fairly 16 Jul 2013 One of the lowest real costs of capital in Asia didn’t prevent an investment slump, but it did put off savers. The economy wouldn’t rely so much on hot money if local households weren’t short-changed. The outmoded state-built apparatus of financial repression needs to be junked.