Asia-Pacific

Sony’s overhaul doesn’t go far enough

12 Apr 2012

The new CEO aims to reverse $6.4 bln in losses by rewiring the TV unit and pushing further into smartphones and medical devices. One-off charges now may flatter earnings later, but the tech company may need new equity to expand. Sony needs deeper cuts and more radical re-rigging.

India can risk a bold rate cut

12 Apr 2012

The Reserve Bank of India has trouble guiding the economy because so little of the population is connected to the financial system. But with growth slowing, there’s a good case that a rate cut now would encourage investment and production - without encouraging inflation.

China’s grip on rare earths market looks fragile

12 Apr 2012

High rare earth prices won’t last forever. Beijing’s drive to shut dirty smelters may support prices near term. But miners elsewhere will be better placed as Chinese producers are held to higher standards. As new mines come online, greater competition should bring prices down.

Ethical economy: Towards a better society in China

11 Apr 2012

The Chinese Communist Party has changed with the country it rules. It wisely moved away from naïve Marxism with the Three Represents mantra. But the richer country needs a firmer and wider social and political base. It’s time to work on the Five Responsibilities.

Bo’s fall reveals China’s cult of anti-personality

10 Apr 2012

The former rising star’s removal from the Politburo, though expected, is a sign that the ruling party has no place for leaders with a penchant for self-promotion or wives who court scandal. Today’s ambitious Chinese politicians should be outwardly bland and keep misdeeds quiet.

China’s positive data hides healthy economic pain

10 Apr 2012

Surprisingly high inflation and a big monthly trade surplus are misleading. Producer prices are falling and exports slowing. But the news is not bad enough to provoke monetary stimulus. Reformers think slowing growth pains are required to make China’s economy more balanced.

Singapore may not escape India’s offshore tax grab

10 Apr 2012

The country’s tax crackdown is likely to prompt an exodus of investors from Mauritius. Some are already shifting their operations to Singapore. The city state is a better established financial centre. Nevertheless, the very act of hopping islands may look like tax avoidance.

World Bank wackiness explains odd U.S. choice

9 Apr 2012

If the competition for the World Bank’s presidency were a normal process, Jim Kim wouldn’t stand a chance. But geopolitics and the bank’s mandate explain why the doctor who couldn’t stop Dartmouth frat boys from consuming “vomelets” may actually be an inspired choice.

Tata’s new guard can break open old markets

4 Apr 2012

Cyrus Mistry’s first major appointment is a young charismatic head of business development. Tata may be one of the few groups with the political and economic clout needed to breathe new life into India’s retail and financial services markets.

Bank of Japan divisions point to stronger yen

3 Apr 2012

The bank talks about fighting deflation, but has done relatively little. Replacing two board members with inflation doves when the seats open on April 4 won’t end the impasse. As long as fears of higher borrowing costs stop the BoJ from printing money, the yen will defy gravity.

Quality of life may one day dethrone NY, London

2 Apr 2012

They’re still the most global cities, A.T. Kearney reckons, with Paris and Tokyo next. But Vienna, rated only 13th among global cities, tops Mercer’s quality of living list. As technology makes location less critical, life quality may matter more. Auckland or Vancouver, anyone?

Temasek on top in SE Asia bank stake swap

2 Apr 2012

The Singaporean fund will exchange its stake in Indonesia’s Bank Danamon for an enlarged slice of DBS, a bigger lender based in its home state. The price is high and there are integration dangers for DBS. But if all goes well, Temasek will enjoy a windfall of almost $2 billion.

Myanmar vote doesn’t give clear win to investors

2 Apr 2012

Aung San Suu Kyi’s by-election win is a big step to democracy, which may bring the end of sanctions. The simultaneous freeing up of the exchange rate is a step to a market economy. But the path to democracy is still uncertain and Suu Kyi’s views on foreign investment are unknown.

India can’t afford a foreign investment collapse

2 Apr 2012

If the latest tax spat goes beyond sulking and investment actually starts to freeze up, India could face a balance of payments crisis. A coordinated letter from international trade associations is as much a rallying cry to investors as it is a message to the Indian government.

Sweat-free iPads come at a price worth paying

30 Mar 2012

Apple scores points for pushing to improve life for workers at the Foxconn “iGadget” factories in mainland China. But change may have been inevitable thanks to rising wealth and labour shortages. Consumers, ultimately, may have to foot the bill, but they should be OK with that.

Hong Kong still haven for tycoons – and investors

30 Mar 2012

Two property moguls have been nabbed by the corruption watchdog. It’s a welcome sign that the city’s plutocrats aren’t untouchable. While conspiracy theories abound, they are far-fetched. If politicians wanted to clip the tycoons’ wings, there are more effective ways to do so.

New bank plan risks dilution of emerging influence

30 Mar 2012

The BRICS are mulling the creation of an institution with aims similar to the World Bank. But an Emerging World Bank may diffuse the effort, capital, and talent dedicated to global economic development. BRICS may also struggle to secure their rightful influence over the original.

India’s tax grab threat could backfire badly

29 Mar 2012

Investors fear that New Delhi will use tax law changes that could trap Vodafone to snare offshore institutions. If that’s not what the government intends, it should say so. If it is, the value of nearly all investment assets is endangered. Capital inflows could slow to a trickle.

Taiwanese money can’t save Japan from Samsung

28 Mar 2012

Foxconn’s $1.6 bln investment into Sharp buys Japan’s electronics company time. But there’s a huge glut in flat-panel screens and the likes of Sharp, Panasonic, Sony and Toshiba may be fighting a losing battle against the Koreans. As Hitachi has shown, it may be best to withdraw.

With TCI’s help, Coal India could top the Sensex

28 Mar 2012

Chris Hohn’s investment fund is raising the stakes in its tussle with New Delhi over the pricing of coal. The challenge is to win the policy argument as well as the legal one. Since reform could make Coal India the biggest company quoted in Mumbai, the outcome could be win-win.