LinkedIn can woo the censors to connect with China 18 Sep 2014 The job-focused social network is fine-tuning censorship policies for its Chinese site, which blocks sensitive posts in the PRC. It’s a contrast with other Western internet firms which have been more reluctant to oblige the censors. Unlike Google, LinkedIn can afford pragmatism.
China stealth stimulus may slip down back of sofa 17 Sep 2014 A reported injection of $81 billion via big banks equates to less than a month of credit. It won’t restore rapid growth, but may help cash-strapped companies pay their bills for a while. High debt and low liquidity are forcing authorities into increasingly intricate manoeuvres.
India in depth: How not to get swamped by capital 17 Sep 2014 Japan wants to invest $34 billion in India. China’s pledge could be several times as large. Realizing these commitments, and digesting up to 12 percent of GDP in foreign capital over five years, will be tricky. The People’s Republic’s own growth strategy offers a useful template.
Alibaba’s small IPO hike leaves room for believers 16 Sep 2014 Boosting the maximum share price by 3 pct won’t affect appetite for the Chinese e-commerce giant’s $21 bln-plus offering. Investors appear more focused on Alibaba’s growth prospects than on governance risks. That points to a warm reception when it starts trading later this week.
China IPOs highlight nuclear power drive 16 Sep 2014 The People’s Republic wants to burn less dirty coal and not import too much gas. That’s why China is building half the world’s 63 new nuclear reactors. The listings of operators CGN Power and CNNC offer a way into the trend – for investors who can stomach the risk of a meltdown.
Sinopec $17.5 bln pump deal lacks reform drive 15 Sep 2014 The Chinese oil titan has sold 30 pct of its petrol station arm to 25 mostly-domestic investors. For them to get a good return, Sinopec’s convenience store sales will have to multiply. Yet the new shareholders have little retail expertise – and even less control over the unit.
Give Germany and China a break 12 Sep 2014 The two world leaders in trade surpluses are sometimes accused of importing too little. In fact, both run surpluses for good economic reasons. If trade imbalances are a problem, it’s because the financial system copes badly with the international cashflows they create.
Best defence against short-sellers is to buy stock 12 Sep 2014 Several Chinese companies are under attack from anonymous research firms. Executives have tried to dispel doubts about their financial statements while railing against unnamed critics. But the most effective riposte to those betting on a lower stock price is to buy more shares.
Global glut means more pain for Europe’s refiners 11 Sep 2014 New plants in China and the Middle East will flood the world fuel markets, lifting output at the fastest rate since 1999. U.S. firms like Phillips 66, with access to cheap crude, can weather the storm. Rivals across the Atlantic, where margins are low, won’t be so lucky.
Likonomics: the China buzzword that wasn’t 11 Sep 2014 A year ago, Premier Li Keqiang seemed to be driving forward economic reform. Now he looks more of a passenger. China’s agenda is dominated by fighting corruption and targeting perceived rent-seeking. Market reforms, and foreign investors, have moved down the pecking order.
China smartphones set to pick off global giants 9 Sep 2014 Home-grown manufacturers dominate in the People’s Republic, shipping three in four phones in the quarter ending June. In the rest of the world, their share is less than 20 percent. Yet low costs are helping them dial in new emerging market customers. Global rivals face a fight.
Calculator: Squaring Alibaba’s $155 bln valuation 8 Sep 2014 That’s the mid-point of the price range for the Chinese e-commerce giant’s upcoming IPO. The figure is bang in line with Breakingviews’ own estimate. Our interactive calculator spells out the key assumptions – and lets you flex the numbers to arrive at your own assessment.
Consumer groups miss China’s reform boost 5 Sep 2014 Stocks in sectors targeted for reform, like telecoms, are up as much as 23 percent this year. Consumer staples are down 12 percent. Makers of everyday goods may have less room for obvious restructuring. Yet if reforms succeed in making China richer, they should benefit.
China’s consumers show early signs of a debt wish 4 Sep 2014 It’s time to retire the idea that Chinese shoppers don’t borrow. Companies have racked up most of the country’s debt mountain. But credit card debt, which delivers generous fees for banks, is rising fast. Though the numbers are small, bad incentives could store up future trouble.
China index: Don’t bank on a rapid recovery 4 Sep 2014 Our index showed China’s economy enjoying a slight uptick in July after the summer’s historic lows. Exports grew at the strongest pace in over a year, while thickening smog hinted at more active industrials. But a steep slide in bank lending kept the brakes on.
E-book: Alibaba and the twelve digits 3 Sep 2014 China’s e-commerce colossus is hitting the road for a $100-billion-plus IPO. But a spectacular growth story comes with quirks, including bizarre governance and founder Jack Ma’s penchant for offbeat deals. Breakingviews offers a punchy primer on the risks and rewards.
Tianhe fraud claims hit at China free-rider effect 3 Sep 2014 An anonymous group says the chemical group cooked its books. Yet the allegations would have been easy to verify by pre-IPO backers like Morgan Stanley. If proven, the charges will undermine the notion that big-name investors can provide insurance against China’s opaque practices.
Six steps to Alibaba’s twelve-figure valuation 2 Sep 2014 As the Chinese e-commerce giant launches its IPO, investors must decide what the shares are worth. Growth, profitability and stock market multiples are a factor. So are potential new businesses, though shaky governance merits a discount. Breakingviews spells out the key numbers.
Don’t cry for China’s pay-capped corporate chiefs 2 Sep 2014 Plans to cut cash salaries for state sector bosses by up to half may sting. But top executives in effect get another currency – political stock. If China’s ruling party had a share price, it would be rising. The trouble is, outsiders can’t easily see what that stock is worth.
Democracy snub leaves Hong Kong only bad choices 1 Sep 2014 Citizens in the former colony have two options: choose between Beijing-approved chief executive candidates, or don’t vote at all. The new ruling leaves little room for compromise and risks a showdown with protesters. China’s leaders seem to care ever less what the world thinks.