Asia-Pacific

Central banks take on market fears

30 Nov 2011

A six-nation coordinated move to make cheaper dollars available globally seems aimed initially at European banks. Like it or not, it shows a willingness to do what private investors won’t. If politicians show similar unity, they could win the standoff with markets over the euro.

China’s rich splash out despite slower growth

30 Nov 2011

Macro data is weakening but art auctions and handbag sales are still going gangbusters. The disconnect is disconcerting. When growth is rapid, conspicuous consumption looks like progress. Now it suggests waste. The callous rich could become targets of political and popular ire.

Myanmar forms centre of economic love triangle

30 Nov 2011

A visit from Hillary Clinton marks the end of Myanmar’s pariah status, but there is much work to be done before the country can offer investors sustainable returns. With the United States, China and India all jockeying for position, capital flows may come too quickly.

Australia still vulnerable despite triple-A crown

29 Nov 2011

Investors love the low official debt, high yields and strong exports to China. A Fitch upgrade makes Australia one of 14 nations with top marks from all three rating agencies. But there’s kryptonite: indebted households and reliance on foreign investors and high commodity prices.

China could gain from helping Europe via IMF

28 Nov 2011

Rescuing the euro zone is a tough sell for a still-poor nation. But like Saudi 35 years ago, China could parlay some of its $3.2 trln of reserves into greater international clout through the IMF. It would be saving a big export market and a reserve diversifier into the bargain.

BRIC success shows the power of a good idea

28 Nov 2011

Goldman’s Jim O’Neill invented the acronym for the leading emerging markets 10 years ago. What started as a good economic theme became a state of mind – the embodiment of a global power shift. So far, so good, but at least one BRIC is likely to disappoint in the next decade.

M&A gives no reprieve for China’s global lawyers

25 Nov 2011

Mallesons of Australia plans to merge with King & Wood, a Chinese rival. It sounds harmonious, but won’t do much to change the fact that foreign counsels get short shrift in the People’s Republic. When the WTO let China in, it largely forgot lawyers. Their prospects look bleak.

China won’t be Asia’s importer of last resort

25 Nov 2011

Slower manufacturing in the second-largest economy is bad news for other Asian exporters like Japan and Korea. They’re counting on China as U.S. and European demand ebbs. But at least a fifth of China’s imports go to making exports, so China may not prove the hedge they hope.

Beijing’s big bazooka packs diminishing punch

24 Nov 2011

Chinese banks may soon have their lending capacity relaxed, freeing them to juice up the economy. But another 4 trillion yuan of stimulus might add just 2 percent to GDP – assuming banks could find willing borrowers. China doesn’t need to lend more, but more wisely.

Tata keeps things in the family

23 Nov 2011

Cyrus Mistry’s appointment as Ratan Tata’s successor continues the habit of dynastic succession in Indian companies. That may not be such a bad thing. But Mistry can promote outside talent by stepping back from the chairmanships of Tata Steel and Tata Motors.

PCCW spinoff can’t unwind tycoon discount

23 Nov 2011

Richard Li’s conglomerate snagged a generous $3.8 bln price tag for its Hong Kong telecom business, thanks to a promise of fat dividends. But the spinoff exposes an inconvenient truth: the mogul’s own holding company is valued at almost 40 percent less than the sum of its parts.

Asia’s half-hearted reform exposed by Western woes

23 Nov 2011

Eastern economies are grappling with slowing exports and receding investment from Western partners. It didn’t have to be this way. Asian economies failed to use boom years to uproot their outmoded development model. Making those changes now promises to be doubly painful.

Chinese accounting paranoia finds new victim

22 Nov 2011

Focus Media’s stock fell 40 percent after it was accused of overstating assets by the same short-seller that targeted Sino-Forest in June. This time the target is a bigger name, and the claims more far-reaching. Fast growth and powerful insiders make Chinese firms easy targets.

Wen paves way for yuan depreciation

21 Nov 2011

China’s premier said the currency should be more flexible “in either direction”. The idea of devaluation might sound strange, but the Chinese trade surplus is shrinking and inflation is cutting into the yuan’s real value. This could be a good time to let the market decide.

China’s own "Little Greeces" should help themselves

18 Nov 2011

Shanghai became the first local government to sell bonds this week. Provinces like Hainan, which has debts of almost 100 percent of GDP, cannot easily go down that route. Beijing might not come to the rescue, so they need help themselves with austerity and asset sales.

India edges open the door to more foreign capital

18 Nov 2011

There are signs that India is getting serious about allowing more international funds to flow into its economy. External pressure for reform is slowly starting to tell on New Delhi’s policy makers. But shortage of capital is the key driver.

Gloats about India’s Icarus miss the point

16 Nov 2011

For many, Vijay Mallya embodies the unsavory flamboyance of India’s newly rich. Some see the problems at the Kingfisher airline he founded as comeuppance. But though grave dangers stalk the entrepreneur, the turbulence in Mallya’s flight path is not all of his own making.

Sino-Forest pays high price for valuable lessons

15 Nov 2011

An independent committee cleared the Chinese group of major accounting worries. But $3 billion of lost market value won’t be easily recouped. Sino-Forest could have helped itself with a simpler structure, more disclosure and by focusing on quality as well as speed of growth.

India is still rising, but it is not shining

15 Nov 2011

The World Economic Forum - best known for its Davos shindig – is holding a summit in Mumbai for the first time. The rhetoric from participants suggests the “India Shining” story is still burning brightly. But the refrain is failing to resonate. The numbers tell a different story.

Sinopec’s M&A strategy gets a little smarter

11 Nov 2011

The Chinese oil major’s $5.2 billion investment in Brazilian oil resembles a deal it did last year – but at 20 pct less per barrel. Non-financial considerations explain some of the difference. But state-owned Sinopec appears to be learning more tricks of the M&A trade.