China

Alibaba can shake off its China discount

2 August 2021

The e-commerce titan's shares have tumbled 40% from an October 2020 peak as Beijing cracks down on tech. It’s now trading at a big discount to Amazon even though both are growing profit at about the same rate. Alibaba's resilient businesses should help the valuation gap narrow.

Evergrande’s fire sale risks too little too late

2 August 2021READY SOON

The indebted developer sold stakes worth $418 mln in media unit HengTen to buyers including Tencent after its shares tanked. But it is also lending HengTen $260 mln for five years, interest-free. With its stock and bonds plunging, this deal looks both stubborn and desperate.

Review: Turning Beijing’s playbook against it

30 July 2021

China wants to become a global hegemon, Rush Doshi, the White House’s lead China wonk, argues in “The Long Game”. To halt its advance, he suggests copying Beijing’s strategy, and discouraging U.S. corporate engagement with China by tweaking taxes. He has few allies and less time.

Evergrande’s downward spiral runs off the page

30 July 2021

Beijing managed the market impact when it allowed quasi-state entity HNA to slide into bankruptcy. It will face more complex problems if privately-run Evergrande folds. The longer authorities wait to signal support, the more pages it will need to add to its corporate disaster playbook.

IPO U-turn is probably Didi’s most sensible route

29 July 2021

The beleaguered $40 bln Chinese ride-hailing group denied a report that it plans to go private a month after its U.S. debut. Changing course would be embarrassing and quite costly. But it may be the best way to get back in Beijing’s good graces amid a continuing crackdown.

Viewsroom: Climate transition, Chinese stocks

29 July 2021

Some of the biggest investors, including Brookfield and TPG, are launching mega-funds to invest in the global transition to a net-zero economy in what could be the ultimate new asset class. Richard Beales and Rob Cox discuss. Plus, Beijing’s crackdown on after-school tutoring.

China makes market tea leaves very hard to read

28 July 2021

It took a while, but an unrelenting stream of crackdowns finally spooked investors. The country’s blue-chip stocks have slid near bear-market territory from a February peak. Although some sectors have been spared, only the truly daring will venture into riskier areas now.

Tencent sends frightening WeChat status update

27 July 2021

Investors wiped $54 bln from the Hong Kong-listed company’s value after it froze user sign-ups on its chat app. Tencent blamed a technical upgrade, reassuring few given regulators have used suspensions to punish other firms. As panic sets in, markets will get harder to calm.

China’s tutoring rules create tough VIE homework

27 July 2021

Variable interest entities used to skirt overseas investment restrictions have existed in a regulatory gray area. Beijing’s ban on foreign funds in education suggests those days are ending. Unwinding the structures will be messy, but also could teach other industries a lesson.

Chinese communists are souring on capitalism

26 July 2021

Beijing wants its $120 bln tutoring industry to turn non-profit, wiping billions off U.S.-listed TAL and peers. Fintech giants are being forced to hand intellectual property to state banks. A push to shrink margins and convert private assets into public goods is gaining momentum.

India will give China tech a run for its money

26 July 2021

A hot list of upcoming Mumbai IPOs is captivating foreign funds that scored big backing startups from Shenzhen, Shanghai and beyond. First-time local investors are adding to the frenzy. Zomato’s market debut epitomises the opportunities for similar valuations and returns.

China’s nimbler Robinhoods have arrows in reserve

22 July 2021

E-brokerage firms Futu and Up Fintech shed a combined $3.4 bln in market value after Beijing's tech crackdown. Growth may slow, but diverse business models spanning wealth management, IPO underwriting and managing employee stock schemes set them apart from the U.S. firm.

Great Wall Motor is all thrills, no frills

21 July 2021

The $54 bln Chinese automaker’s no-nonsense approach tripled earnings in the first half. Its affordable conventional designs are crowd-pleasers, while smart bets on battery technology are goosing the valuation. Shareholders in flashier rivals like Geely might take note.

Reckoning looms for Chinese developers’ loan dodge

20 July 2021

Forced to cut interest-bearing debt, Chinese real estate companies like Evergrande borrowed $556 bln from their suppliers last year. Now they are struggling to repay, prompting a crackdown. Offloading land assets could raise cash quickly, but developers have cause to resist.

Carbon market faces slow burn to success in China

19 July 2021

The world’s largest emissions-trading system is hampered by data concerns, dirt-cheap prices and feeble fines. It also currently exempts most big polluters and lacks a mechanism to reduce emissions. It’s a start, but the scheme needs an overhaul to match Beijing’s climate goals.

China’s IPO crackdown exposes U.S. weaknesses

19 July 2021

Several companies have spiked plans to list abroad after Beijing ramped up oversight. But the move by regulators also highlights the frailties of an American financial system that is heavily reliant on disclosure. Chinese firms have long shown that’s easy to take advantage of.

China’s uneven recovery threatens Xi’s tidy-up

15 July 2021

The economy expanded at a slower-than-expected 7.9% in the second quarter as small firms struggle. Easing monetary policy is a quick fix but will fuel lending to sectors President Xi Jinping is trying to rein in. Pressure is building for him to kick the can down the road again.

Nationalist flame wars will singe China Inc

14 July 2021

Angry users are ditching Didi’s ride-hailing app for alleged data leaks to foreigners. Patriotic extremism has stung overseas brands like H&M; now it’s turning on domestic companies, sometimes with official encouragement. It sets a dangerous precedent that could get out of hand.

Zara’s Chinese rival threatens from the shadows

14 July 2021

Online fashion site Shein cranks out ultra-cheap designs at lightning speed. It discloses next to nothing about its operations and tried to scrub its Chinese origins off the internet. Its opacity is strategic, but competitors had best study its model.

China chip crash helps fine-tune tech policy

14 July 2021

Lavish government funds fuelled the rapid expansion of semiconductor darling Tsinghua Unigroup. It now faces bankruptcy with $31 bln of debt piled up. Letting it fail reflects Beijing's new, more selective strategy of developing industry champions. It may yield better results.