China

China stagflation meme bodes ill for policymakers

5 March 2021

Beijing set a growth target of above 6% for 2021 on Friday, after a post by a famous economist warning of a toxic mix of slower growth and rising prices went viral. With activity cooling, shares down and commodities up, popular anxiety hints at a monetary conundrum.

Bubble tea IPO can avoid bitter aftertaste

4 March 2021

Nayuki is planning to list in Hong Kong. Demand for its brews is growing quickly, though Covid-19 was a drag. It could be worth $2.4 bln based on where peers trade. Investors may be wary after the Luckin Coffee saga, but smart expansion and cost control would sweeten the pot.

Xi’s green campaign will restructure state sector

3 March 2021

Shares in energy champions like Sinopec are rallying as they announce plans to serve Beijing’s carbon-neutral push. State firms generate 4.5% of global GDP; cleaning them would pay big dividends. But smaller players can’t pivot so easily. Green progress means dirty defaults.

Chancellor: A bear market in bonds is beckoning

2 March 2021

Bond bull runs tend to last for decades, making it nearly impossible to accurately predict a turning point. But recent fixed-income extremes, together with the complacent attitude of central bankers and investors, suggest history’s greatest bond boom has passed its sell-by date.

Nio risks running low on power on Europe road trip

2 March 2021

The $78 bln electric-car maker’s net loss halved in 2020 as revenue doubled and costs fell. It has plenty of cash, too. But sales growth has slowed. And founder William Li’s plan to drive into Europe will be expensive, and hard for a Chinese luxury brand, sapping recent progress.

Danone has plenty more cash cows to milk in China

1 March 2021

Chief Executive Emmanuel Faber has unveiled his latest plan to placate activist investors. He wants to sell its $2 bln stake in China Mengniu Dairy. It means pulling out of a growing firm. But peddling Danone’s own brands to thirsty Chinese consumers will keep the cream flowing.

Evergrande contagion tests Beijing’s generosity

26 February 2021

China’s $10 bln retailer Suning.com threw a financial lifeline to the troubled property developer. Its founder is now selling a controlling stake as the embattled group faces $5 bln of debt due this year. A government bailout, which may be imminent, would send the wrong message.

Joe Biden’s best weapon against China is teamwork

23 February 2021

The new administration is toning down the rhetoric but is nevertheless taking a tough line on Beijing. Less capricious trade policies and a willingness to work with Western allies may make the approach more effective than Donald Trump’s attempts to rein in the People’s Republic.

HSBC’s renewed Asia focus goes only so far

23 February 2021

Boss Noel Quinn is aiming for more savings and an extra $6 bln of investment in the faster-growing region. Even if all goes to plan, it will remain a high-cost, low-return bank with global sprawl. More radical steps, like spinning off the UK business, would alter the equation.

JD offers peek into China’s e-commerce machine

23 February 2021

The $160 bln web retailer is spinning off its logistics arm. Upgraded delivery systems have supported an online shopping boom that is driving yet more growth in the sector: a virtuous cycle. JD's high-tech operation and shrinking losses should excite investors.

Turf war puts Chinese regional GDP plans at risk

23 February 2021

China may skip setting a national growth target for a second year. But provinces have set their own, suggesting an expansion of at least 6.8% in aggregate. The central bank doesn't want to ease, while the finance ministry is reluctant to spend. It's quite the trilemma.

Capital Calls: Petrobras CEO, Kohl’s

22 February 2021

Concise views on global finance in the Covid-19 era: Brazilian President Jair Bolsonaro nominates a former general to replace the oil group's market-friendly boss, tanking the shares; and U.S. department store Kohl’s has some unhappy shareholders.

Ant’s loss is small Chinese banks’ loss too

22 February 2021

Regulators will require online credit providers to fund 30% of loans made with commercial banks. That’s manageable for Jack Ma’s outfit, though it dims the $300 bln valuation it once enjoyed. But many small banks rely on fintech allies for growth. New rules constrain that too.

Capital Calls: Petrobras

19 February 2021

Concise views on global finance in the Covid-19 era: Brazil's president becomes Petrobras' activist.

Capital Calls: Walmart, Buffett/Chevron

18 February 2021

Concise views on global finance in the Covid-19 era: Walmart gets an unfair ding from investors over its latest earnings report; and the Sage of Omaha takes another bet on the profit still to be made from fossil fuels.

A stripped-down BYD would run faster

17 February 2021

The Chinese automaker’s $3.8 bln share sale tapped a craze for electric vehicles. Yet even after a 500% rally over the last year, its Hong Kong stock looks cheap next to Nio and others. Separating battery-powered cars from other businesses could be one way to narrow the gap.

Capital Calls: Jay vs. Larry

10 February 2021

Concise views on global finance in the Covid-19 era: Jerome Powell takes on Larry Summers in the inflation debate.

Chinese property developers blur red lines

9 February 2021

From Country Garden to Vanke, many are breaching at least one of Beijing's three leverage rules – known as red lines – designed to curb wild growth, one study found. Craftiness with JVs, shell companies and more obscure debt realities. The crackdown will require extra vigilance.

Hong Kong retail mania one-ups U.S. short squeeze

5 February 2021

Kuaishou shares nearly tripled on their $5.4 bln debut. One in four working-age Hong Kongers bid for a stake in the Chinese video app, putting up $162 bln. Dubious rallies without organised campaigns like GameStop’s provide stronger evidence of a frenzy getting out of hand.

It’s time HSBC’s big bosses followed the money

4 February 2021

The $108 bln bank may relocate the co-heads of its investment bank to Asia. There are good excuses for many financial services giants to avoid putting global chiefs in Hong Kong or Singapore. Given HSBC’s dependency on the region, however, it’s a wonder it has taken so long.