Fugitive whistleblower puts China on the spot 10 Jun 2013 Beijing may enjoy U.S. discomfort over Edward Snowden’s move to seek refuge in Hong Kong. But allowing him to stay, if he tries, would strain Sino-U.S. relations. Meanwhile, sending him home might upset local activists. It sets up a test of China’s policy towards the city-state.
How Huawei can dial down the fear factor 10 Jun 2013 Forget links to the Party or fears of security breaches: the telecom supplier is under fire because China is mistrusted. The U.S. spying furore merely adds to concerns that networks are leaky. Huawei can’t change that, but it can upgrade governance, and get consumers on its side.
Wine tariffs won’t end China’s thirst for Bordeaux 7 Jun 2013 It might sound like restricting EU imports would cut Chinese demand for fine wines. But China mostly imports cheap plonk: top vintages tend to trade in offshore centres like Hong Kong. French chateaux have more to fear from China’s anti-corruption drive than from any trade war.
What keeps China from playing fair? Foreign CEOs 7 Jun 2013 China’s markets favour domestic companies, but the likes of Dreamworks, Standard Chartered and Burberry do well by working with what they can get. Individually, this corporate pragmatism makes sense. Collectively, it may undermine efforts to make China “do the right thing”.
Obama and Xi should consider Confucian diplomacy 6 Jun 2013 If the emperor merely faces south, the sage argued, the rest falls into place. The U.S. and Chinese leaders could do the same when they meet in California. Issues like hacking and trade should resolve over time through mutual self-interest. For now, inaction is the best policy.
Asian tycoons give LBOs an eastern twist 5 Jun 2013 Shuanghui’s takeover of U.S. pork group Smithfield combines hefty leverage and limited cost savings. Recent deals in Thailand and Singapore have also been quasi-buyouts. As long as local banks remain flush, Asian groups will give private equity firms a run for their money.
Soho tycoon’s U.S. deal is sign of top – for China 4 Jun 2013 Zhang Xin, the new part-owner of New York’s GM Building, typifies China’s real estate elite. Her company increased earnings fivefold in as many years through timing, panache and smart accounting. Investing her wealth abroad suggests the good times at home are coming to an end.
GM Building’s $3.4 bln price tag is sign of times 3 Jun 2013 A 40 pct stake in the Apple Store-tenanted Manhattan landmark has set a new record, with a value a fifth above a 2008 transaction. A Chinese property billionaire and Brazilian bankers are the buyers. But the building has a cursed history – not just for the carmaker that built it.
Double arbitrage validates China’s pork purchase 30 May 2013 Why is Shuanghui paying $4.7 billion for U.S. producer Smithfield? Simple: imported pork is cheaper than the Chinese-reared variety, and shoppers will pay up to avoid suspect local produce. With luck, the deal will spark a change in the factors that make it so attractive.
Tea Leaf Index: China needs less shady stimulus 29 May 2013 Our index has slumped to the lowest level since August 2012. Then, a surge in “shadow bank” lending drove a property-led recovery. But real estate is already on a tear, and banks are now being reined in. Unless urbanization gets an extra push, recovery looks distant.
Europe rightly throws shade on solar tariffs plan 28 May 2013 Why would Germany and other EU countries reject punitive tariffs on Chinese solar panel makers? After all, they are the ones who suffer. But European companies in other industries producing in China have more to lose. Fairness may not prevail, but rationality should.
HK art boom rests on sketchy foundations 27 May 2013 The city’s blockbuster art fair showed it has the infrastructure and location to draw crowds of rich Asian buyers. But Hong Kong also benefits from other drivers, like cheap money and the financial controls stunting mainland China’s own art scene. Those look less sustainable.
Microsoft stages nebulous Chinese comeback 24 May 2013 The software titan has for years been stuck in a piracy trap in China - many use its products, and few pay. Cloud-based services like Windows Azure are less prone to misuse. This time there are new problems: fierce competition, and politicians that favour domestic rivals.
China-U.S. audit truce wisely avoids big issues 24 May 2013 Auditors in China can no longer claim that “state secrets” prohibit disclosure to the U.S. watchdog. That should keep Chinese companies from being banned in U.S. markets. There are open questions about sovereignty and state capitalism, but those are fights for another day.
Japanese stocks join the global risk parade 23 May 2013 The Nikkei’s 7 pct drop is an overdue correction: the index had risen by two-thirds in six months. What’s striking is that the selloff was sparked by concerns over U.S. interest rates and Chinese growth, not Abenomics. Being a haven for risk-hungry investors has its drawbacks.
Solar subsidies don’t merit costly trade war 22 May 2013 Solar panel prices are depressed, but irate Western manufacturers probably exaggerate the role of Chinese government support. While punitive EU tariffs and tit-for-tat Chinese retaliation might help profit, they would almost certainly make solar energy less competitive.
Goldman trumps HSBC in financial Chinese chequers 22 May 2013 Selling its final stake in lender ICBC leaves Goldman Sachs with an annual return on its investment of around 36 percent. HSBC, which just sold out of insurer Ping An after ten years, notched up a lesser 23 percent. The reason: the UK lender put strategic value before profit.
Alibaba’s next superlative: China’s top fee payer 20 May 2013 The e-commerce giant is already a big generator of investment banking revenue. Factor in a potential IPO, and for global banks Alibaba could be the biggest client to come out of China in a decade. In a weak market, the battle lines are already being drawn.
Danone gets China dairy deal, but not the cream 20 May 2013 The French group scrapped talks with milk producer Mengniu five years ago - just in time to avoid 2008’s melamine scandal. Since then, Mengniu has changed its supply chain and become state-owned. Danone’s new $417 million investment looks safer, but the terms look tougher.
What China can learn from Hong Kong’s war on graft 15 May 2013 Chasing a former watchdog for lavish dinners sounds trivial, but focusing on the little things is what made Hong Kong clean up. China’s leaders also pledge to root out corruption, but lack three powerful weapons: independent institutions, freedom to complain, and zero tolerance.