China doesn’t yet belong in global currency club 1 Apr 2015 The yuan may meet the IMF’s vague terms for inclusion in its quasi-currency. That doesn’t mean it’s ready for a prominent place in central bank vaults. A big question is how the yuan might fare during a period of financial instability in China. Answers may soon be forthcoming.
China housing rescue uses right tool for wrong job 31 Mar 2015 Homebuyers can now get bigger mortgages more easily. If fundamentals drove Chinese house prices, such loosening might help. As it is, arresting the slide requires a belief that property values will go up again. That’s not in the gift of Beijing’s mandarins.
China offers lessons for Saudi market opening 30 Mar 2015 Despite the differences between the two, the kingdom is copying China’s cautious approach as it grants foreigners direct access to its $523 bln stock market. The experience of the People’s Republic suggests Saudi Arabia’s opening is likely to be a whimper rather than a big bang.
China’s banks turn lens on unhappy economy 27 Mar 2015 Lenders’ annual results give a chance to see what’s happening in corners of the country other data doesn’t show. The numbers reveal companies hit by falling commodity prices, small businesses struggling and consumers losing confidence. Banks may soon be called to the rescue.
Rob Cox: Pirelli flirts with joke version of hell 26 Mar 2015 That’s where the chefs are British, the lovers Swiss and the mechanics French. Pirelli risks becoming the corporate equivalent: the management Italian (as in the joke), its owner a Chinese state enterprise, and other partners Russian. Minority investors won’t find it funny.
ZTE’s turnaround not as impressive up close 26 Mar 2015 The Chinese telco equipment maker’s earnings almost doubled in 2014 – an improvement on the losses it was making three years ago. Yet revenue increased just 8 percent. ZTE is banking on smartphones and wearables to drive growth, but users don’t yet seem to be taking the bait.
China brokerage IPO a triumph of wonky markets 25 Mar 2015 GF Securities is paying a high price for foreign currency and international prestige. It will sell $3.6 bln of new shares in Hong Kong around 50 percent cheaper than those already listed in China. Investors back home get diluted – except those connected enough to play both sides.
Good news: China’s bad debts are on the rise 24 Mar 2015 Agricultural Bank’s 28 percent increase in duff loans over six months looks modest next to what’s happening at some lenders. Across the board, write-offs and overdue loans are ballooning. Still, China’s economic slowdown may be giving cover for some welcome honesty.
Alibaba deal spree strains its financial strength 24 Mar 2015 The e-commerce giant barely explained its recent investments in an Israeli venture capital fund or U.S. chat app Snapchat. Similar purchases absorbed 75 pct of Alibaba’s operating cash flow in 2014. Though its core business is robust, returns on the new ventures are uncertain.
China debt swap conjures money from nothing 23 Mar 2015 Turning 1 trillion yuan ($160 billion) of local-government debts into bonds will lower rates for borrowers and may also create value for the banks who lent to them. What looks like a win-win, however, is really just a way of spreading debt risks more thinly.
Chanel’s China price cut signals luxury turbulence 20 Mar 2015 The fabled French brand has taken the unprecedented step of lowering prices in Asia. The weak euro has fed a troublesome grey market and fueled perceptions high-end groups are ripping off Eastern shoppers. Despite the risk to their bottom lines, rivals may have to follow suit.
China’s world bank has rickety foundations 20 Mar 2015 The country’s patchy record of funding big projects at home and abroad hasn’t deterred Western countries from rushing to join its new Asian infrastructure bank. To lure private capital, the body will have to be commercial and transparent. Early signs suggest it will be neither.
China’s YouTube makes for uncomfortable viewing 20 Mar 2015 Youku Tudou’s losses are widening, as it bets ever more heavily on movie production, gaming and live broadcasting to offset its loss-making internet video business. These new ventures will further erode profitability. The company’s standalone prospects are far from compelling.
China’s capital flight lands on New York doorsteps 19 Mar 2015 Chinese investors have pumped $10.4 billion into U.S. real estate in two years, most of it in Manhattan. And that doesn’t include the homes they actually live in. Americans should welcome their new neighbours. The question for China is how many of its elite it can stand to lose.
Chinese developers’ debt tricks come home to roost 18 Mar 2015 Investors are still mystified by how housebuilder Kaisa’s borrowings more than doubled in six months, bringing it close to collapse. The answer may lie in two kinds of accounting sleight of hand, seemingly blessed by auditors. Kaisa isn’t the only property company being creative.
China’s art market paints itself into a corner 13 Mar 2015 The People’s Republic has become one of the world’s largest art hubs, with sales of $12 bln in 2014. Yet minimalist cross-border trade sketches a picture of an introverted giant: heavy duties and local tastes mean most of the action is staying firmly within China’s borders.
Asia’s Alibaba wannabes buy into wishful thinking 12 Mar 2015 A new generation of Asian e-commerce companies is inviting comparison with Jack Ma’s tech colossus. The analogy is useful but not always flattering. Like Alibaba these young companies benefit from fast-growing online markets - but are less likely to become true giants.
Kaisa haircut is bad omen for China property debt 9 Mar 2015 The troubled developer’s proposed restructuring leaves creditors facing lower interest rates and delayed repayments. A shrinking cash pile and the sudden appearance of $5.6 bln of previously hidden debt should alarm all investors in the sector. Kaisa may not be an isolated case.
China’s internet sector runs on harmonious enmity 9 Mar 2015 For Amazon to open a store on rival online retailer Alibaba’s website sounds like sleeping with the enemy. But competition in China’s e-commerce sector isn’t as fierce as it seems. The big internet companies have too little. Their customers meanwhile have too much.
Chinese FX intervention could be due a comeback 6 Mar 2015 For over a decade a weak yuan brought in export revenues. Then a rising currency attracted investment. The falling exchange rate helps the former but puts the latter in jeopardy. In order to avoid a financial crisis, stronger is probably better, even if it means more meddling.