China

Temasek tinkering could put StanChart in play

17 Apr 2012

The Singaporean fund’s latest asset reshuffle has revived talk about its $10 bln stake in the emerging market lender. Banks from the U.S. to Japan would like to get their hands on StanChart. But with the exception of China’s biggest lenders, most would struggle to pull it off.

Freer yuan sends the right message

16 Apr 2012

Widening the Chinese currency’s trading band will make the central bank’s life easier, and greater volatility should deter foreign inflows. A more hands-off approach should also pacify trade partners. It’s a small but decisive step that shows deeper reform is still on the agenda.

Growth is the least of China’s three big worries

13 Apr 2012

GDP increased 8.1 percent in the first quarter - slow for China and a little worse than expected. But those missed basis points are not a big risk for the economy. More telling for investors are ongoing political ructions and a banking system that could easily fall into crisis.

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.

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.

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.

Global asset values may find new zest from China

27 Mar 2012

Slower growth and doubts about accounting are leading international investors to rethink China. That’s precisely what the Chinese themselves are doing. As they diversify beyond the borders of the Middle Kingdom, the value of global property assets could benefit.

Slowing China may bring relief to commodity buyers

22 Mar 2012

China’s manufacturing activity looks to have shrunk in March. As the economy cools, so will China’s appetite for globally traded commodities like oil and iron ore. The shift away from heavy industry, and exploitation of cheap domestic shale gas, should continue the trend.

Jaguar far from becoming China’s next top model

22 Mar 2012

The luxury carmaker owned by India’s Tata will join Mercedes and BMW in producing in China. It’s smart to get a local badge, since things are likely to get tougher for foreign auto firms. But the regulatory road is long, and low-end carmaker Chery is a curious choice of partner.

China reform may require a deeper crisis

20 Mar 2012

The outgoing premier and his likely successor have both called for change. But the biggest required reforms will leave powerful losers. Unlike Greece, Spain or Russia, China lacks creditors or voters to hold leaders to account. Greater turmoil may be needed to force a shift.

China’s pig farms will dampen corn bulls’ hopes

19 Mar 2012

Hopes of China becoming a corn importer have fuelled a global rally in corn prices. But traders underestimate Beijing’s will for self-dependence in this commodity. Improvements in pig-farming efficiency and supply-chain bottlenecks will make global corn prices vulnerable.

Purges and paranoia weaken China’s crisis defences

15 Mar 2012

The ousting of Party hotshot Bo Xilai after a rebuke by China’s Premier Wen shows divisions run deep. Modernisation is a sticking point: reformists see it as a cure for unrest, while conservatives see it as a cause. A divided China can still grow, but may not handle shocks well.

HSBC gains little from BoCom cash boost

15 Mar 2012

It’s hard to justify ploughing another $1.7 billion into Bank of Communications when HSBC’s own returns are so low. HSBC can neither raise its 19 percent stake in the Chinese lender, nor sell without causing a diplomatic incident. The benefits for investors are far from obvious.

Youku-Tudou price pop not only about synergies

14 Mar 2012

The Chinese video portals’ combined market value swelled by $1.5 billion after they unveiled a merger. Cost savings of $50 million a year only partly explain it. Other factors may include a squeeze on short sellers, and hopes that an enlarged Youku could itself be a bid target.

China has much to gain from rare earths fight

13 Mar 2012

A new WTO case against China may put Beijing on the defensive. But China’s global dominance puts it in a strong position to resist pressure. Besides, the backdoor trade protectionism plays well at home, as does the effort to make rare earth mining less environmentally damaging.

China’s trade deficit is sign of things to come

12 Mar 2012

Unusually poor demand from Europe and extraordinary purchases of copper and soybeans helped create a rare $4.2 bln trade deficit in the first two months of 2012. But as China imports less to process for export and more to consume, monthly deficits will get more frequent.

Merger of China’s YouTubes shows web maturity

12 Mar 2012

The $3 bln tie-up of China’s two pure-play online video groups looks like a defensive move in the country’s fiercely competitive Internet market. Diversified players like Baidu and Sina are investing in their own video portals. Profits are coming – but only for those with scale.