Asia-Pacific

What else could Manmohan Singh reform?

17 Sep 2012

India’s prime minister has unleashed three bold economic reforms. Assuming his nerve holds in the face of strong protests, he may even get a taste for such announcements. India’s financial sector, mining industry and labour market would all benefit from a similar approach.

Fed’s approach to monetary policy looks Chinese

14 Sep 2012

Critics accuse the People’s Republic of using an artificially low exchange rate to promote job creation at home. Now the U.S. central bank says it will keep on stimulating until unemployment falls. The approach is the same, but the Fed’s domestic bias carries more global risks.

QE3 honeymoon may be brief for emerging markets

14 Sep 2012

The flood of cheap dollars from the Fed will lift all boats for a while. But if investors fear it’s not reviving growth, funds will pool in safe havens from inflation. And if it works, the tide will favour recovery plays. Either way, QE is sure to trouble non-U.S. central bankers.

Politics and economy cloud China’s Davos

14 Sep 2012

It’s no surprise the China-focused World Economic forum lacked previous years’ lustre. With a leadership change coming, officials are cautious about what they say. Businesses worry about a weaker economy. And even host city Tianjin shows the limits of China’s rapid development.

New Delhi must stand its ground on subsidy cuts

14 Sep 2012

The government has announced a bold 14 percent hike in the price of diesel. Now it needs to stay the course, embrace the decision rather than apologise for it, and move fast to get even more done. A shift in public spending from consumption to investment is the ultimate goal.

China’s anti-personality cult needs revision

14 Sep 2012

Suppose China’s missing next leader were actually replaced by a double, as one wild rumour suggests. Who could tell? China has eschewed personality politics in favour of dull, clever bureaucrats. That served the country well, but future reform calls for more charisma.

Regulator’s past haunts India’s Sahara case

14 Sep 2012

The chairman of India’s securities watchdog is under a cloud. Last year, a deputy wrote to the prime minister alleging his boss was going easy on Sahara. Now that the conglomerate has been ordered to repay $5 bln to 30 mln investors, the regulator needs to show his independence.

Thais hope for third time lucky with $10bn F&N bid

13 Sep 2012

The Bangkok beer moguls twice failed to get their hands on Asia Pacific Breweries, but prodded Heineken into a higher bid. Now they’re offering to buy the 70 pct of parent company Fraser & Neave they don’t own. At S$8.88 per share, every extra share they get looks a bargain.

China’s big fiscal guns best left in the holster

13 Sep 2012

There’s room for China to spend its way back to higher growth. Government debt is low, and projects aplenty are waiting to be built. Yet despite the slowdown, political timing and euro uncertainty argue against quick action. For now, leaders can afford to talk rather than do.

South Korea’s slowdown response lacks urgency

13 Sep 2012

Falling exports mean the economy is cooling fast. Token tax rebates for homeowners and car buyers won’t have much impact. For debt-addled consumers to loosen their purse strings, interest costs must fall. Yet the central bank seems surprisingly reluctant to cut rates.

Ethical economy: Economic action needs its hard core

12 Sep 2012

Poor-country industrialisation requires revolution that is as much cultural as economic. Many are stuck less than half way up the ladder. Hard core revolutionary capitalists are required, but need help because they are often isolated, subverted or unable to lead.

China’s absent princeling is a mystery not a crisis

12 Sep 2012

Weeks from a leadership changeover, the unexplained disappearance of the likely next president has cast doubts over the fragile process. Yet China’s system hinges less on individuals than in the days of Mao and Deng. These days, the “how” matters far more than the “who”.

Huawei’s $2 bln UK charm offensive is only a start

12 Sep 2012

Faced with western governments’ security fears, the Chinese telecom gear maker is pouring investment into Britain. Creating foreign jobs may help it secure access to overseas markets. But to dispel controversy, the company also needs to become more open and consumer friendly.

India’s bad economic data may spur better policy

12 Sep 2012

Almost flat industrial production will help the new finance minister and the central bank trade a fiscal deficit cut for a rate cut. Without some action, a ratings downgrade looms. That threat could help overcome political resistance to reducing wasteful fuel subsidies.

U.S. shale pioneers won’t reap Chinese gas riches

11 Sep 2012

For the first time, Beijing is cracking open the door for foreign frackers. Smaller, specialist companies have blazed the trail in America, but to profit in the Middle Kingdom will take time and resources they don’t have. Instead, it’ll be the usual suspects like Shell and Exxon.

Australia will find out if it’s fat or all muscle

11 Sep 2012

Muscular Australia, or flab? The economy looks distorted with paunches in debt, trade and house prices. A less buoyant China and iron ore price are serving as a stress test. Lower rates and a weaker Aussie dollar can help with rebalancing - but might not be needed.

"Mao-ville" plans show China’s stresses

11 Sep 2012

The plans for $2.4 bln of investments in the Great Helmsman’s birthplace are typical of a $1 trillion flood of possibly too ambitious local initiatives. But Xiangtan’s renovation of its Mao museum is special, a reminder that China’s tensions are historical as well as economic.

Coal’s slide poses broader risks for Indonesia

11 Sep 2012

It’s the biggest exporter of coal for electricity, but coal accounts for only 4.4 pct of GDP. The bigger worry is that falling exports spook foreign investors, undermine a provincial boom, and hurt poor workers. With elections looming, that could ratchet up nationalist rhetoric.

China’s unbalanced path is still the right one

10 Sep 2012

President Hu Jintao has advocated more infrastructure spending, amid grisly new economic data. It’s at odds with the received notion that consumption should drive expansion. But a blind push for rebalancing makes no sense. China still needs investment - just not waste.

Asia’s crowded IPOs keep banks busy but poor

7 Sep 2012

A dearth of listings has forced underwriters to crowd onto new offerings. Banks get league table credit, while companies can claim safety in numbers. But there’s little sense in scrapping over a dwindling fee pool. Banks must justify their existence in other ways - or shrink.