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from Breakingviews:

China house prices on brink of pessimism spiral

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China is rare in many ways, but its housing market is just as dependent on psychology as everywhere else. After years of gains, prices are now falling in most Chinese major cities.  When negative thinking sets in, it’s hard to escape the pessimism spiral.

House prices can be notoriously volatile. In OECD countries between 1970 and 1995, a 40 percent price gain over six years was typically followed by at 25 percent decline over the subsequent five. Later studies show a bank crisis makes the correction deeper and longer. China looks due a correction. Average house prices in 40 big cities, according to data from the China Index Academy, have now risen 49 percent in 5 years.

The good news is that the boom has not been fuelled by leverage. The 5.1 trillion yuan ($838 billion) of new housing loans extended since 2010 is just 20 percent of the value of houses bought during that time, government data shows. That reduces the risk of households being forced to sell, or getting trapped in negative equity.

from Breakingviews:

SoftBank and Shrek may lack on-screen chemistry

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

SoftBank’s acquisition strategy is nothing if not animated, but it’s not always easy to see a clear plot. The Japanese conglomerate’s next move could be a bid for DreamWorks Animation worth $3.4 billion, according to The Hollywood Reporter. SoftBank’s giant balance sheet could easily absorb the hit and miss earnings of film production. Yet with each big buy, it becomes less clear how the group’s parts fit together.

from Breakingviews:

Hong Kong shreds hopes for orderly disorder

By Robyn Mak and John Foley

The authors are Reuters Breakingviews columnists. The opinions expressed are their own. 

Hong Kong’s experiment in orderly disorder is coming unstuck. Thousands of protestors took to the streets on Sept. 29 calling for political reform and universal suffrage, and many still remain a day later. Markets are open, and the financial sector hasn’t taken any direct hits. But what started as a meticulously planned act of civil disobedience now risks spiralling into something more volatile and unpredictable, with damaging long term-implications for the city.

from Breakingviews:

Rock star Modi needs more business-friendly riff

By Kate Duguid

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

Indian Prime Minister Narendra Modi used his headline gig at Madison Square Garden to make an emotional sales pitch on Sunday morning. His suggestion that Indian-Americans invest freely in their ancestral land was met with wild cheers from the capacity crowd. But even for a politician with a rock star’s popularity, the country’s business-unfriendly reputation remains a formidable obstacle.

from Breakingviews:

Starbucks avoids froth in $913 mln Japan buyout

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Starbucks Corp. has served up a grande Japanese buyout without any froth. The U.S. coffee chain is buying the 60.5 percent of its listed local unit that it doesn’t already own for around $913 million - a discount to its market value. Expiring franchise license agreements give Starbucks Corp. a rare chance to take full control of its business in the world’s third-largest economy on the cheap - as long as minority shareholders don’t put up a fight.

from Breakingviews:

China smartphones set to pick off global giants

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Not everyone is able to spend $500 on a smartphone. For those lacking funds or wanting better value for money, China’s handset makers increasingly appeal. Today, most of their sales are domestic. Yet low costs are helping them dial in new emerging market customers.'

from Breakingviews:

Global poverty needs a post-industrial definition

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Global poverty needs a new, post-industrial definition.

The $1-a-day threshold, the most-often cited marker of penury, is an anachronistic legacy from the time when being able to fill a human stomach could be reasonably equated with putting raw manpower to productive use in farms, factories and on construction sites.

from Breakingviews:

Malaysia Airlines plight points to riskier world

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Fatal air accidents almost never happen, fortunately for both passengers and investors in airlines. Yet Malaysia Airlines has been struck twice by tragedy in little over four months. The aviation industry may have its own set of challenges, but it is a reminder that even more robust businesses need to consider political risk carefully.

from Breakingviews:

Alibaba finance arm better out than in for IPO

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Alibaba’s secret weapon is its payment division. Yet Alipay isn’t part of the Chinese e-commerce company’s upcoming initial public offering. The company is “conceptually” thinking about reuniting them, according to people familiar with the situation. But the status quo, however strange, looks better.

from The Great Debate:

A three-part plan for Obama’s pivot to Asia

President Obama embarked this week on an eight-day trip to Japan, South Korea, Malaysia and the Philippines. He has tried to reassure the leaders of those countries that his administration is committed to carrying out its signature foreign policy initiative: the rebalance towards the Asia-Pacific.

Obama entered office with the belief that the U.S. had over-invested in the Middle East, particularly in Iraq and Afghanistan. In an October 2011 essay-cum-policy statement, then-Secretary of State Hillary Clinton explained that with the wars in Iraq and Afghanistan winding down, the U.S. should “pivot” to the Asia-Pacific. In January 2012, the Department of Defense formalized her recommendation, announcing that the U.S. would “of necessity rebalance” towards the region.

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