Diplomacy

Macron faces stronger Merkel after state election

15 May 2017

France’s new president needs German support for his euro zone reform ideas. Angela Merkel’s challenger Martin Schulz is more supportive of tighter fiscal integration and more investment. The triumph for Merkel’s party in a regional poll suggests any changes will need her consent.

Moon win offers South Korea ray of sunlight

9 May 2017

The election of liberal Moon Jae-in to the presidency heralds a softer stance on North Korea and restores domestic stability. That’s welcome. But he will need to unite a polarized nation to succeed where his ousted predecessor failed in resetting South Korea's growth model.

Markets call Trump’s war bluff on North Korea

8 May 2017

Investors are ignoring the U.S. president’s war rhetoric against Pyongyang, snapping up South Korean securities and modestly buying protection against default. Optimism over the global economy and a new leader in Seoul result in a mute reaction compared to past flashpoints.

Wall Street served low-hanging China fruit basket

10 Apr 2017

Negotiators for presidents Trump and Xi have reportedly agreed to ease the U.S. financial sector's access to China. It's an easy concession as the benefits will mostly accrue to Beijing: greater inflows of foreign capital, plus help upgrading bond and equity markets.

Trump’s Syria strikes don’t justify crude worries

7 Apr 2017

Oil spiked after U.S. missiles rained on Syria. The fear isn’t that supplies will be disrupted but that Syrian ally Iran, which has been increasing its output of crude, will be hit with renewed sanctions. Even if that happens, other forces could keep markets well supplied.

China’s reformers could use tough line from Trump

5 Apr 2017

The U.S. president has threatened his Chinese counterpart with punitive trade policies. A more creative approach would target barriers to foreign investment in the People’s Republic. That would find support from U.S. corporations – and China’s frustrated pro-market faction.

Saudi will find luring May was the easy part

5 Apr 2017

The British prime minister’s charm offensive in Riyadh may help sell more planes and halal lamb. It also sends a message to EU negotiators. What Saudi really needs is investment, people and skills – which hinge on the so-called soft issues Theresa May seems happy to overlook.

Citi’s Saudi comeback hangs on friendly oil prices

23 Mar 2017

The American lender wants a new licence to do deals in a kingdom it mostly exited over a decade ago. Economic reforms and the sale of state assets like Aramco could be rich pickings. A big variable is oil. The lower its price, the more juicy mandates banks can expect.

Xi has weak pitch selling status quo to Trump

14 Mar 2017

The U.S. president will reportedly host China's Xi in April, but neither has much to bring to the table. Xi wants Trump to stick with the status quo on trade, investment and climate change. In exchange China will make friendly noises about investment and reform, but little more.

China gives Trump cheap trade trinkets

9 Mar 2017

China looks to have fast-tracked the U.S. president's trademark applications, and its economy is going his way too. U.S. imports shot up 38 pct last month, and the yuan has firmed. There's less to the data than meets the eye, and the trademarks are trouble.

North Korea’s pressure points are hard to push

9 Mar 2017

Pyongyang's missiles and an alleged murder are vexing its few friends; China's ban on coal imports suggests a fresh desire to tame its neighbour. Old foes like the U.S. could also apply more pressure through secondary sanctions. But that may, in turn, worsen relations with China.

U.S. tech sanctions will rattle China’s firewall

8 Mar 2017

ZTE will plead guilty for violating U.S. trade curbs. The charges could have been more severe and an $892 mln fine is manageable. More powerful is the message it sends that the U.S. is prepared to take action against Chinese companies to rein in the likes of Iran and North Korea.

Seoul-Beijing feud cues Lotte to end China misery

3 Mar 2017

The South Korean retailer is under attack from Beijing for letting Seoul use its land for a defence system. Chinese state media is vowing to make life hard for the group. It's hard already. Losses in China have sparked a founding family spat. This rift is a good excuse to exit.

Trump wraps U.S. budget flaws in $54 bln flag

27 Feb 2017

Boosting military spending by that sum largely at the expense of diplomatic soft power may please ardent supporters. Fixing Defense Department mismanagement would be wiser, though, and avoid a clash in the president's own party. Jingoism risks bringing higher costs in many forms.

North Korea defies Trump’s art of the deal

13 Feb 2017

The U.S. president has softened potential conflicts with Japan and China. Pyongyang, which fired a missile on Sunday, is more troublesome. Unlike its neighbours the hermit state offers little room for common ground on jobs or trade. Trump's business savvy will be of little use.

EU has too much to lose in global finance gunfight

10 Feb 2017

European Commissioner Valdis Dombrovskis has hinted at reprisals if other states raise barriers for EU-based financial groups. Brussels could in theory slap higher capital demands on foreign banks, and restrict euro clearing. But aggression would hurt it as much as its new foes.

Tokyo is no economic enemy for Trump

6 Feb 2017

Japanese Premier Shinzo Abe is preparing a big package of U.S. investment and job creation to placate the president. Trump's claims of deliberate yen devaluation are wide of the mark. But Tokyo has little choice but to respond, even though it is already an important U.S. ally.

Missing tycoon casts fresh doubt on HK’s status

2 Feb 2017

A mainland tycoon has vanished from Hong Kong, reportedly taken by Chinese agents. If true, it would suggest China's seizure of Hong Kong booksellers in late 2015 was not a one-off. The case could cast fresh doubt on the financial centre's degree of autonomy from Beijing.

Saudi’s Trump friendship more about money than oil

1 Feb 2017

Riyadh may boost its investments in American energy under the new president. An abundance of shale oil and a focus on domestic supply means Saudi Arabian crude is no longer enough to secure U.S. political support in the Middle East. Its cash is still attractive, though.

Trump could shove Iran closer towards China

13 Jan 2017

Secretary of State nominee Rex Tillerson backs a review of Tehran's sanctions deal, echoing harsh words from his president-elect. China has already identified Iran's weak economy as a target for investment. Cementing the trend could chip away at U.S. dominance in the Gulf.