Viewsroom: Boeing’s struggles 14 Mar 2019 The U.S. aircraft maker is facing a crisis after a second crash involving an updated version of its workhorse 737 jet. There’s a financial hit to Boeing from countries grounding the plane; but there are geopolitical implications, too. Plus: China tries to stimulate its economy.
Pinduoduo offers New York a Shanghai bargain 14 Mar 2019 The $29 bln shopping app is giving investors a taste of Chinese tech: promise, growth and volatility. Shares fell over 17 pct after it spent far more than expected in 2018 to lure and retain customers. Still, the experience of rivals like Alibaba suggests better times ahead.
China’s tax collectors could yet blunt stimulus 14 Mar 2019 Officials say Beijing’s $300 bln levy reduction this year sets a world record. Yet despite a big slash last year, the government’s total take kept rising. Better enforcement could partly offset lower rates, making it harder to predict just how much cuts might juice growth.
Ping An stock repurchase comes with Beijing twist 13 Mar 2019 China’s biggest insurer plans to buy up to $1.5 billion of its Shanghai shares. The company, which has a Hong Kong listing too, says it’s undervalued, but the deal also stems from official efforts to pep up mainland markets. Shareholders benefit, but policy winds blow both ways.
China’s Starbucks rival pushes its luck 13 Mar 2019 Lu Zhengyao, Luckin Coffee’s chairman, wants a $200 mln personal loan in exchange for a role on the upcoming IPO, Reuters reports. Such hubris suggests the delivery-focused chain, which faces intensifying competition, is overheating. Investors should beware getting scalded.
Blackstone’s round trip brightens HNA attractions 12 Mar 2019 The private equity shop is buying back control of a Hong Kong construction company it sold to the Chinese group in 2016. The $900 mln price tag belies a slug of cash that comes with it. That makes the valuation inviting and may increase interest in HNA’s sprawling portfolio.
The Exchange: Out of the desert, into a trade war 12 Mar 2019 Weijian Shan spent his youth labouring in the Gobi Desert. Now he runs $30 bln at PAG, after stints at TPG and the World Bank. One of the first Chinese to study in America after the Cultural Revolution, Shan discusses trade tensions, and the economic risk of historical amnesia.
Meituan Dianping drives itself to distraction 12 Mar 2019 The $42 bln Chinese super-app operator grew fourth-quarter sales by a robust 89 pct. Meituan’s entire valuation is reflected in the strength of its food delivery unit against Alibaba-owned Ele.me. That raises fresh questions about costly ride-hailing and bike-sharing diversions.
Chinese stock xenophobia is a problem for MSCI 11 Mar 2019 After expanding the weight of A-shares in its benchmarks, the index provider had to drop a popular tech stock thanks to policies capping foreign shareholdings. If it happens too often, MSCI indexes will be less representative of demand. It’s a bad look for China’s market opening.
Review: Gig-economy firms tread precarious path 8 Mar 2019 The likes of Uber tapped casualised labour to become global giants. They have created a “precariat” class of workers, open to exploitation and abuse. Colin Crouch’s “Will the Gig Economy Prevail?” offers a manifesto for a benign alternative, but underplays technological shifts.
Hong Kong bank showcases the XX factor 8 Mar 2019 As International Women’s Day brings more sad stats about corporate diversity, $46 bln Hang Seng Bank can stand proud. Its shares have outperformed under three consecutive female CEOs and a cohort of female directors. It sets a powerful example for companies worldwide to follow.
Cooler Chinese military spending is cold comfort 6 Mar 2019 Beijing will dedicate just 5.9 pct of its budget to defence in 2019, after a splurge last year. Yet investments in unconventional weapons, plus a fishing fleet that pushes territorial claims with the help of a maritime militia, will keep the regional arms race simmering.
Nio’s right place, right time may be short-lived 6 Mar 2019 Tesla’s Chinese rival is revving up, delivering 11,348 units in its first year. Nio bucked a slowdown in the world’s largest car market thanks in part to sparse competition for luxury electric vehicles. But its net loss nearly doubled, and new rivals are hitting the road in 2019.
Beijing strikes the right balance on stimulus 5 Mar 2019 The government lowered its growth target at the annual opening of parliament, as expected, and rolled out a $300 bln tax cut, which was less so. Officials will keep a hawkish eye on debt. The policy package looks like an effective, if awkward, way to support the real economy.
China Tower sends message investors want to hear 5 Mar 2019 After a weak debut, shares of the $42 bln mobile infrastructure firm have rocketed more than 50 pct in three months. A faster domestic rollout of 5G and a higher dividend help. Unexpected reassurances on corporate governance also set the company apart from other state monopolists.
Seats are elusive in U.S. trade musical chairs 4 Mar 2019 Some kind of deal with China may be within reach. Yet Trump officials are considering cutting India from a duty-free program. Congress wants to change a pact with Canada and Mexico. And talks with the EU and Japan are tense. For businesses, trade clarity is in short supply.
China’s parliament will address half the problem 4 Mar 2019 The annual legislative session starts Tuesday, setting key economic targets for officials attempting to balance growth against debt. But investors hoping it will resolve bigger questions about trade, industrial policy, and foreign suspicion of Chinese tech will be disappointed.
Stricken Hanergy drops investors into black hole 1 Mar 2019 The solar company wants shareholders to swap frozen shares for stock in a vehicle which may or may not relist in China. Hanergy might well be ejected from the Hong Kong exchange before trading resumes, denying them an alternative. This raw deal would set a terrible precedent.
The yuan belongs in a U.S.-China trade pact 1 Mar 2019 Washington might ask Beijing to formally pledge not to devalue its currency. China says a weaker yuan is not in its interests, which might be true. But past manipulation distorted the U.S. economy, and could happen again. A deal without a currency clause will be flawed.
Viewsroom: Warren Buffett eats crow 28 Feb 2019 Kraft Heinz’s poor earnings, $15 bln writedown and accounting investigation forced the Berkshire Hathaway boss to admit he overpaid for the nuts-to-Velveeta cheese purveyor. Breakingviews columnists discuss what went wrong. Plus: Trump buys more time in his China trade spat.