Asia-Pacific

Complexity caps allure of Yahoo’s Alibaba solution

13 Feb 2012

A mostly cash split-off promises a tax-efficient way for the troubled U.S. Internet firm to cut its stake in a Chinese rival. Yahoo also would accept a group of assets as part of the deal being discussed. But the more elaborate it gets, the more diluted the benefits may be for Yahoo.

IMF offers best way for China to save Europe

13 Feb 2012

Beijing will say it wants to see Europe survive at this week’s joint summit. Lending directly isn’t the way. China can do better by pitching into a $1 trillion IMF-led rescue, with less chance of losses, less nationalist ire, and over time, a bigger seat at the IMF’s top table.

China banks make virtue out of an old vice

13 Feb 2012

They have reportedly been told to roll over maturing loans to cash-strapped local governments. It’s a throwback to the bad old days of Chinese banking, and risks depriving good borrowers of credit. But it beats messy defaults, and helps keep borrowings transparent for regulators.

Greater equality helps even the 1 percent prosper

10 Feb 2012

The growing gulf between the rich and the rest has mainly been seen as threatening political turmoil. But inequality also appears to hamper economic growth, recent IMF research shows. If so, the 99 percent shouldn’t be alone in pushing to narrow the wealth gap.

Obama and Xi may make unhappy Valentines

10 Feb 2012

Iran, Syria and the yuan will all be on the agenda when the U.S. president meets his likely next Chinese counterpart on Feb. 14. Obama is under pressure to talk tough; Xi to keep cool. It’s a rerun of a similar meeting a decade ago, but pre-election timing adds to the tension.

Rio Tinto is brave to open dividend gusher

9 Feb 2012

The miner’s 34 pct dividend hike is the latest sop to investors after the disastrous Alcan deal of 2007. Rio can afford it for now. But with capex and cost pressures increasing, Rio needs the super-cycle to continue. Sticking with share buybacks would have maintained flexibility.

Iranian oil-for-rupees poses diplomatic dilemma

9 Feb 2012

A clever plan to pay Iran in India’s own currency would leave Tehran with a mountain of illiquid rupees – like a gift card it can only spend in Indian shops. New Delhi may hope that the cash comes back through more trade or investment. Washington wouldn’t like that one bit.

The world threatens to return to normal

8 Feb 2012

A good U.S. jobs report is prompting a global rethink. Rate cuts in South Korea and Australia are now less likely. Stocks are rallying. Treasury yields are up from ultra-lows. The euro zone crisis remains grave, but the world may be improving. If it is, safe havens are in danger.

Multinationals tell real China growth story

8 Feb 2012

Earnings of companies like Yum Brands, Siemens and LVMH say what China’s official data often doesn’t. Consumer brands show inflation is still a concern. Industrial firms tell of rapidly slowing investment. As for luxury firms, their success shows the rich are doing just fine.

India’s 2G ruling may stir hornets’ nest

8 Feb 2012

When ordering the revocation of corruptly awarded telecoms spectrum, the Supreme Court said auctions should be used to sell off state assets. That won’t just affect the future. It could also lead to other old licence awards, in telecoms and mining, being reopened.

IMF takes too euro-centric view of China

7 Feb 2012

The Fund says a bad slowdown in the euro zone would cut China’s GDP growth in half. Not likely, since China relies much less on exports than in 2008. The IMF is also wrong about Beijing’s appetite for another big stimulus programme. China’s real risks are internal, not external.

Indian airlines get the wrong help

7 Feb 2012

The country’s beleaguered aviation sector needs a boost. But letting airlines avoid punitive state taxes by directly importing fuel isn’t smart. Some tax is necessary to pay for environmental costs. The real target should be the vast state subsidy given to loss-making Air India.

China has moral high ground over "dirty skies"

6 Feb 2012

Beijing’s principle of non-interference looks callous when it lends support to oppressive regimes, as in Syria and Sudan. But the refusal to pay the EU’s pointless, extraterritorial and unilateral airline carbon tax is right, even if Chinese doubts about global warming are not.

Facebook needn’t envy life inside China firewall

3 Feb 2012

About half the world’s Internet users live in China, where soon-to-IPO Facebook is banned. But the potential is uncertain anyway. China’s social networking scene is competitive; Facebook would be a latecomer. Google and Groupon show it’s hard to succeed inside the Middle Kingdom.

Sony resets ahead of management reboot

2 Feb 2012

The $2.9 billion of forecast losses for the year reflects a year of glitches. Thai floods, the strong yen and JV write-downs all caused problems. With expectations set low, incoming CEO Kazuo Hirai can focus delivering the winning products and software Sony currently lacks. But it won’t be easy.

Japan’s bluster can’t sink the irrepressible yen

2 Feb 2012

Officials want the central bank to print yen to stop its climb to help exporters. They shouldn’t hold their breath. The Bank of Japan may oblige for long enough to cool the currency’s rise, but an ageing population and massive debts mean fighting for a weaker yen is a losing battle.

Airtel, Vodafone boosted by Indian telecoms ruling

2 Feb 2012

The Supreme Court’s revocation of 122 licences hurts all those using spectrum awarded in the scandal-ridden sale of 2008. But those relying on earlier licences – notably Airtel and Vodafone – should benefit as the market consolidates and threadbare margins rise.

Asia no refuge from U.S. slump for multinationals

1 Feb 2012

For a while, the region’s fast-growing economies helped global behemoths counter lackluster growth in developed markets. But export-dependent Asia has now succumbed. The likes of Caterpillar, DuPont and UPS are losing a key source of global revenue growth.

Nomura bucks the trend, but not enough

1 Feb 2012

The Japanese bank returned to profit in the last quarter as corporate finance rebounded and fixed income held up. Given dismal markets and the exit of top banker Jesse Bhattal, it could have been worse. But investors will need further improvement to justify keeping the lights on.

Shanghai needs bigger ideas to be a global hub

1 Feb 2012

The Chinese city has outlined ambitious plans to build a global yuan trading centre by 2015. But key reforms are missing. Without freer capital flows, exchange rate flexibility, and a more open financial regime, Shanghai’s markets can be huge, but not really international.