Asia-Pacific

China’s “guanxi” system may cost Wall Street dear

6 Sep 2012

Citi, Goldman and UBS have benefited from the “do a favour, get a favour” principle. All bailed out troubled Chinese firms, and got special perks later. Rivals have not been so lucky. Yet problems facing China’s banks could mean more special treatment is required in future.

No need for Malaysia to jump off a fiscal cliff

6 Sep 2012

Two rating agencies have taken harsh views of the country’s public debt in the past month. But Kuala Lumpur shouldn’t panic. Public spending is helping to attract private investors. Though Malaysia needs to broaden its tax base, hasty belt-tightening would be counterproductive.

Ethical economy: Can communist China drop Marxism?

5 Sep 2012

It is easy to dismiss the verbiage of China’s leaders as buzzword bingo, but behind the many slogans lies a serious debate about how the monopolistic Communist Party can evolve in ways that suit its more prosperous society. In truth, it can’t evolve. It should yield gracefully.

Sun Myung Moon was a sort of business success

4 Sep 2012

True, his Unification Church’s commercial operations made large losses and ran up huge debts. But even with weak operating management, the church’s knack for religious services was outstanding. Moon’s followers provided more than enough donations to repeatedly bail out disasters.

Nomura rejig signals break with post-Lehman era

4 Sep 2012

Top dealmaker William Vereker is giving up his executive role at the investment bank, and may leave. It’s another sign that global ambitions have been reined in by commercial reality. Now Nomura must explain how its new strategy will serve shareholders better.

Iron ore crash reveals flawed boom-time economics

4 Sep 2012

The steel ingredient’s sharp fall from $150 to $90 a tonne defies cold economic logic. But then again, a market that had been preternaturally hot wasn’t likely to behave rationally. For Australia’s Fortescue and other highly leveraged miners, the lesson is painful.

Investors need steel to endure next market phase

4 Sep 2012

Global equities had a good summer. Many indexes are ahead 10 percent since early June. Optimism has also showed in shifting bond yields. The world still has serious problems, and near-term reversals are possible. But asset allocators should hold their nerve.

Mongolia swells anti-China M&A tide

4 Sep 2012

Chinese state miner Chalco pulled a bid for Mongolia’s SouthGobi after clear signs Chinese government-backed firms aren’t welcome. Such protectionism is mostly muddle-headed, but increasingly accepted. Bigger deals, like CNOOC’s $15 billion bid for Canada’s Nexen, aren’t immune.

Urban real estate may not be such a safe haven

4 Sep 2012

Investors seeking refuge from economic turmoil are snapping up prime real estate in cities like London and Hong Kong. The flight to safety crowds out local inhabitants. In the absence of a correction, cities may be forced to become less welcoming to foreign buyers.

Clean break could give China reformists hope

3 Sep 2012

Outgoing President Hu Jintao may cut his direct links to the top when new leaders come in early next year, unlike his predecessor Jiang Zemin. That might make it easier for the incomers to make their mark, and push through reforms with less distraction from factional fighting.

Hon Hai cash not enough to restore Sharp’s edge

3 Sep 2012

The Taiwan company’s boss left Japan without a new deal for the 9.9 percent stake in Sharp he proposed buying in March. Sharp only has cash to last about six months. Without an overhaul or sale of its LCD and solar businesses, the electronics maker may struggle to stay afloat.

India sensibly considers foreign tax U-turn

3 Sep 2012

With the economy in the doldrums and a reform agenda threatened by political gridlock, the government should rush to accept an expert panel’s recommendation of a U-turn on tax proposals. That helps with the route in; next is to help returns by speeding up the economy.

Pakistani economy is much stronger than the state

3 Sep 2012

It’s all too easy to write off Pakistan: scary security situation, the government and the judiciary at each other’s throats and U.S. drones pounding tribal areas. But the economy is not a wasteland. Consumption is strong and a saner energy policy can revive investments.

Review: the two-sidedness of a richer China

31 Aug 2012

Rising incomes offer rich opportunities for foreign marketers, as consultant Shaun Rein explains. But richer Chinese are more demanding customers for multinationals, which will also find the challenge from domestic rivals more daunting. Wealth isn’t ending political risks either.

China’s burdened banks can’t stop the slowdown

31 Aug 2012

After the 2008 slump, banks helped to stimulate the economy by doubling their loan books in three years. China needs another dose, but now lenders’ balance sheets are too clogged up for them to offer much help. That leaves two options: set banks free, or bind them even tighter.

How can India’s Sahara pay back $3 bln?

31 Aug 2012

India’s Supreme Court has ordered the group to refund cash it raised from millions of small investors, plus interest. That’s a victory for the little man. The next question is how the sponsor of India’s cricket team and owner of New York’s Plaza hotel can comply with the ruling.

Oil’s climb raises risk of Asian stagflation

30 Aug 2012

Growth is slowing, but crude has climbed by a quarter in the past two months. That’s not good for energy-hungry Asia, which relies heavily on imports. Higher fuel costs could keep inflation high, making it more difficult for central banks to cut rates as economic growth slows.

Death of “Made in China” is greatly exaggerated

30 Aug 2012

Rising wages have put pressure on all manufacturers in China. Yet lower commodity prices have helped the likes of Samsonite to boost earnings. The yuan has also stopped rising. Those who can use automation to keep costs low can still gain from staying in China.

Ethical economy: The smog of development

29 Aug 2012

Bad economic analysis has contributed to China’s bad pollution. More dangerous air and water can make financial measures look healthier, and the environment doesn’t feature in standard growth models. A better approach requires the study of political and economic institutions.

Old grudges don’t change Sino-Japan potential

29 Aug 2012

Forty years after the two countries declared relations “normal”, they seem anything but. A clash over contested islands has produced foolish rhetoric from Tokyo and angry protests in Chinese cities. Yet economic ties are a success. More gains will come if cool heads prevail.