UK’s Big Bang barely mitigates City’s Brexit pain 9 Dec 2022 Finance minister Jeremy Hunt is fiddling with some peripheral regulations to try and boost the City’s competitiveness. It won’t reverse the flow of bankers to Europe. The exodus might even speed up if the EU finally gets moving on its own financial reforms.
Rio Tinto plays chancy round of Mongolian roulette 7 Dec 2022 After years of wrangling, the fate of a $3 bln offer for the rest of the Oyu Tolgoi copper mine’s partner heads to a vote. A win would make a key piece of growth easier to manage. If the bid fails, minority shareholders face stake dilution and Rio managers may merit the boot.
Railway fight gets stakeholder capitalism on track 5 Dec 2022 After President Biden blocked a strike that threatened to disrupt the U.S. economy, investors want Norfolk Southern and Union Pacific to let shareholders vote on the sick-pay sticking point. Such proposals bring welcome attention to fresh ways of thinking about the bottom line.
Friendshoring makes sense if done in the right way 5 Dec 2022 The United States and its allies want to build up suppliers of goods such as solar panels in friendly countries so they’re not vulnerable to Chinese disruptions or blackmail. To avoid self-harm they should define friends broadly and not attack China economically, says Hugo Dixon.
China’s Covid pivot may be damned by faint praise 5 Dec 2022 President Xi Jinping told EU officials that recent virus variants are less lethal, green-lighting more quarantine relaxation and inspiring markets. The next step is persuading households that hoarded $1.9 trln this year to spend or invest it. That won’t be easy or quick.
China needs a Covid target more than a GDP target 2 Dec 2022 After a wave of protests, officials are preparing citizens to live with the virus. Beijing has plenty of economic goals, quotas and deadlines but no published plan for epidemiological transition. There are many templates. What’s key is picking one, and sticking to it.
The bubble in predicting the end of the world 1 Dec 2022 The globe faces multiple threats to peace and prosperity. Several new books address the challenges of enormous debt, geopolitical rivalries and climate change, predicting disastrous consequences. The best thing investors can do is keep a level head, writes Edward Chancellor.
Yandex split marks end of Russian tech hopes 1 Dec 2022 The group once known as the “Russian Google” may split its international and Russian businesses. Ex-finance minister Alexei Kudrin will head the shrunken local arm. The company’s founders can start anew, but investors in the former Nasdaq darling will likely remain bereft.
China’s messy options for ending zero-Covid 1 Dec 2022 Protests broke out across the People’s Republic this week as authorities tightened lockdowns to contain the virus. In this Viewsroom podcast, Breakingviews columnists discuss the difficulties of walking back a policy that leader Xi Jinping has convinced the country is necessary.
Jiang Zemin made China richer and more unequal 30 Nov 2022 China embraced entrepreneurs, developed markets and alleviated poverty under former President Jiang Zemin, who has died aged 96. His pragmatism probably saved the Communist Party. But the inequality his era spawned still haunts his successors.
UK banks’ Big Bang thankfully looks like big flop 30 Nov 2022 Prime Minister Rishi Sunak wants to use Brexit freedoms to boost the City’s appeal. Yet supervisors plan to introduce tougher bank capital rules than in Europe, and so-called ringfencing will remain for big lenders. That’s good: strong regulation can be a competitive advantage.
China decoupling takes one step forward, one back 29 Nov 2022 Wealthy nations want to cut their reliance on the country’s factories and consumers. That’s happening in goods like electronics and auto parts, but trade and investment trends show the opposite in electric vehicles and other areas. The world is as dependent on China as before.
China Covid ills go from bad to chronically worse 28 Nov 2022 Nationwide protests will pressure Beijing to ease strict lockdowns. Yet officials have dragged their feet for the past two years: some 27 mln elderly are unjabbed and they face a shortage of hospital beds. These failures are quickly narrowing China’s reopening options.
Protests leave China facing a terrible trilemma 28 Nov 2022 Officials’ muddled response to spiking Covid cases has set off unrest spanning cities and social classes. The government, having wasted over two years declaring victory, must now deal with political instability, contain disease and salvage growth. There is no easy way out.
How to design a formula to pay for climate loss 28 Nov 2022 COP27 saw countries agree to a “loss and damage” fund to help states bear the effects of climate change. But it didn’t say how it would work. Hugo Dixon proposes a formula which encourages countries to cut carbon emissions by pinning the cost on the biggest polluters.
Gulf’s World Cup love-in has uncertain shelf life 25 Nov 2022 Egypt and Turkey used the tournament to smooth over old differences, and ex-rivals Saudi Arabia and Qatar are getting along. Riyadh may even use its new oil heft to put $5 bln in cash-strapped Ankara’s central bank. The risk is new tensions, perhaps over Iran, upend the goodwill.
UK and EU’s new goodwill could be significant 23 Nov 2022 British PM Rishi Sunak wants to improve trade relations with the EU. Progress will only be piecemeal and slow, even if the two sides agree on how to implement their 2019 deal on Ireland. In the meantime small deals are possible, and they could normalise the path to closer ties.
EU gas cap is indirect signal to cut power demand 23 Nov 2022 The bloc’s proposed brake on natural gas prices at 275 euros per megawatt hour is a fig leaf. The ceiling is so high and with such stringent conditions that it may never be activated. Its main use may be to remind EU states their best option is to use energy more efficiently.
The world can harness trade to save the planet 21 Nov 2022 Trade is a major cause of global warming. The solution is to tax commerce in carbon-intensive goods and remove tariffs on clean ones, to support low-carbon technologies, and to do all this fairly. It’s a priority for next year’s COP28 conference in Dubai, says Hugo Dixon.
Capital Calls: ABB, Italian budget 21 Nov 2022 Concise views on global finance: The $57 bln Swiss engineering group is selling a minority stake in its car charging unit, as a fallback to volatile IPO markets; premier Giorgia Meloni’s hard-right government targets a budget deficit of 4.5% of GDP in 2023.