China

Soccer world will miss Chinese sugar daddies

20 July 2017

State media has questioned Suning’s purchase of Inter Milan, part of a $3 billion mainland soccer splurge, amid an offshore M&A clampdown. The acrobatic financing of AC Milan may attract Beijing’s attention next. Benching Chinese buyers could hurt cash-strapped European clubs.

Alibaba rewrites its e-commerce playbook

20 July 2017

China's online giant is trumpeting "new retail": a push into bricks-and-mortar shopping. That could help sustain high growth. But abandoning the asset-light model which has been Alibaba's unique selling point will weigh on profits.

Wanda and Sunac go back to M&A 101

20 July 2017

The Chinese developers have been forced to rejig their $9 bln property deal. The result is a less fiddly structure with a third party. That might get the sale through, but Wanda's long list of problems make it unclear if it is any closer to its bigger goal of listing onshore.

Malaysia power IPO will test 1MDB stain

19 July 2017

China Nuclear wants to float assets acquired for $2.3 bln from disgraced 1MDB. A Kuala Lumpur listing may smooth local misgivings over Chinese ownership. But it is unclear if investors are ready to look beyond the fund scandal. Recent listings also suggest it will be a hard sell.

German climate change policy takes Trumpian turn

18 July 2017

Angela Merkel has castigated the U.S. President for pulling out of the Paris accord. Yet two German states are putting mining jobs ahead of cutting carbon emissions. If they don’t reconsider, the Chancellor’s green credentials – and the global agreement – will suffer a blow.

Xi pours cold water on China’s “creativity” rally

18 July 2017

Investors, hearing President Xi call for a clampdown on financial risk, are speeding their exit from small caps and tech stocks into "old economy" blue chips. The bubble in the valuations for early-stage startups could be next to pop. That would not be a bad thing.

Wanda’s M&A punishment is too much, too late

17 July 2017

Chinese banks have been ordered to halt lending to entertainment and property giant Dalian Wanda, Reuters reported, in what looks like retroactive punishment for big foreign investments. Such blurry lines around what is and isn't allowed do Chinese outbound investment no good.

China’s revived economy rests on borrowed pillow

17 July 2017

Gross domestic product grew 6.9 pct in the second quarter, capping a solid first half. Robust manufacturing, foreign demand, strong commodities and a softer dollar give the government time to attack bad debt and get housing prices under control. But Beijing needs to hurry.

Chinese green car boom fuels lithium rush

17 July 2017

Beijing's policy push toward electric vehicles is driving investor interest in lithium and lithium miners. The price of lithium carbonate has almost trebled since 2015, and acquisitions are underway. Demand for the suddenly strategic commodity could trigger a tussle over supply.

GLP logistics buyout just about gets from A to B

14 July 2017

The Singaporean group accepted a S$16 bln offer from its own CEO and Chinese buyout firms. The decision seems more about deliverability than price, which is a worry when buyers are also insiders. Still, the 25 pct premium adds enough financial bubble-wrap to ensure safe passage.

China finance powwow marks inflection point for Xi

14 July 2017

Officials gather today in Beijing for a major policy conclave. Challenges include high debt and poor agency coordination. President Xi Jinping is increasingly concerned about financial risk. The meeting offers a chance for the leader to refurbish his reform credentials.

Speed bump warranted in China-Chicago bourse trade

13 July 2017

Some U.S. lawmakers want the SEC to block the sale of the Midwest exchange to Chinese investors. Their concerns are largely fear mongering. But as self-regulators, all such venues will soon get access to customer data as part of a new audit trail. That justifies closer review.

Britain learns how not to think about work

12 July 2017

A review of the UK “gig economy” suggests some jobs have conditions that make them little better than having no job at all. Others appeal much more than pay levels would suggest. Employment data does not capture the difference. Developing countries have known this for decades.

Sunac and Wanda charm market with trust loan magic

12 July 2017

Property giant Dalian Wanda has lent its credit profile to rival Sunac to help it buy $9.3 bln of Wanda's own properties. Investors are enthusiastic, but the deal relies on a class of shadow financing that is increasingly unpopular with regulators for good reason.

Alibaba’s insurer offers new play on online boom

11 July 2017

Zhong An is the insurer for China’s internet age, protecting Xiaomi handsets and packages bought on Alibaba. It boasts fast growth, powerful backers and a strong market position. At the right price, a mooted Hong Kong IPO of up to $1.5 bln should be well-covered.

Sunac seals China knight role with $9 bln Wanda buy

10 July 2017

The indebted developer is taking a big portfolio of tourism and hotel properties from Dalian Wanda, allowing the latter to reduce debt. Sunac has already splashed cash to help troubled tech startup LeEco. The latest overtures will add to Sunac's imposing mountain of leverage.

China’s $6.3 bln shipping buy is delicately stacked

10 July 2017

COSCO Shipping is leading an offer to buy Orient Overseas. The price, equal to 1.4 times book value, is expensive for the loss-making business. A further agreement to preserve jobs, and the Hong Kong target's listing, sets a high bar for the Chinese state firm to create value.

Viewsroom: How China changed Hong Kong

6 July 2017

It’s 20 years since the British handed the island and adjacent territory back to the mainland. Breakingviews’ Asia columnists explain how Hong Kong’s economy and society have changed and ask whether this once-dominant regional financial center can regain some of its lost luster.

Beijing spreads tension with Tomorrow selloff

6 July 2017

Authorities are compelling Tomorrow Holdings, owned by a missing Chinese billionaire, to sell insurance and banking units, Reuters says. It is not clear if this is about politics, crime or systemic risk. Still, it is a worrying template for other conglomerates also under scrutiny.

Beijing’s reversal on credit scores is ominous

5 July 2017

China's central bank no longer wants to let private outfits like Alibaba assess consumer creditworthiness, Reuters says. That’s doubly unwelcome. Borrowers need better credit scoring. And this will concentrate even more power in the state’s Orwellian “social credit” system.