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from Breakingviews:

China’s Singles’ Day shows market power of one

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By John Foley

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

China’s retail sector is about to be plunged into collective madness. On Nov. 11, online shoppers are likely to snap up over $4 billion of goods when prices halve in celebration of “Singles’ Day”. Billed as a celebration of unmarried people, the event is actually a cue for massive online discounting. Consumers benefit, but the best deal goes to Alibaba, which reinforces the dominance of its Tmall and Taobao online marketplaces while leaving sellers to do the heavy lifting.

Singles’ Day resembles U.S. sales promotions, but with even more dizzying numbers. Over 2 percent of the nation’s annual e-commerce outlay is spent on the day, compared with half a percent for U.S. Cyber Monday. Last year Alibaba attracted 213 million unique visitors on Singles’ Day - equivalent to a third of China’s entire internet-using population. Premier Li Keqiang has praised the e-commerce giant for generating a consumption-stimulating “shopping spree”.

In reality, however, Singles’ Day demonstrates not consumer power but monopoly power. Alibaba’s market share of over 80 percent gives it huge sway over how sellers reach online customers. Brands on Tmall must cut prices, mostly by 50 percent, to be part of the site’s heavy 11.11 marketing campaign, for example. No-one is forced to participate, but those which don’t risk losing serious market share. Unlike rivals such as Jingdong, Alibaba doesn’t hold or deliver stock, so it’s insensitive to the prices of goods sold on its site.

from Anatole Kaletsky:

This weekend, China will plot its economic future

The ponderously named Third Plenary Session of the 18th Central Committee of the Chinese Communist Party, which takes place this weekend, is a more important event for the world economy and for global geopolitics than the budget battles, central bank meetings and elections that attract infinitely more attention in the media and financial markets.

The obvious reason for this meeting’s importance is that China is destined in the long run to become the world’s biggest economy and a political superpower. And the Third Plenum, traditionally held roughly 12 months after the appointment of a new Party leadership, has been used twice before as an occasion for the new leaders to spell out the main strategies they hoped to implement as they consolidated their power. At the Third Plenum in 1978, Deng Xiaoping launched the market reforms that unleashed the power of the profit motive in China, and it was at the corresponding event in 1993 that Jiang Zemin accelerated the process of dismantling state-owned enterprises and integrating China into the world economy that culminated with China’s accession to the World Trade Organization in 2001.

from Breakingviews:

U.S. investors’ love of tech defeats fear of China

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By Peter Thal Larsen

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

For U.S. investors, love of technology has conquered a fear of China. Shareholders are snapping up shares of Chinese internet companies going public stateside. It’s a striking contrast with the recent past, when accounting scams and poor governance prompted many to shun mainland stocks.

from Breakingviews:

China enters era of enlightened numerology

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By John Foley 

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

China has revealed the symbolic number that drives its economic policy: 7.2 percent. That’s the minimum growth rate Premier Li Keqiang says is needed to ensure a stable job market. Fetishising numbers sounds unhealthy for a country raised on central planning, but for China it may be a useful indication of how leaders will balance reform with stability.

from Ian Bremmer:

Chinese reform is coming, but not the political kind

In a western democracy like the United States, we assume that the best time for a leader to accomplish something is in the first year of his first term. The election has just ended, the opposition is still scattered, and the legislative mandate is intact. Everybody still talks about Franklin Delano Roosevelt’s first 100 Days for a reason.

In authoritarian governments, like China’s, it’s supposed to be different. Steering such a large bureaucracy takes time, as all the moving pieces catch up with one another. What matters is minimizing risk surrounding the transfer of power, and then engaging in a slow buildup of consensus. And yet, Xi Jinping is proving the conventional wisdom wrong. After just six months at the helm, Xi is already clearly on track to accomplish far more than his predecessor Hu Jintao.

from Breakingviews:

China’s banks languish in valuation twilight zone

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By John Foley

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

What if investors valued China’s big lenders the same way they do global banks? By one measure, lenders like ICBC and Bank of China would be worth twice what they are today. Instead, the country’s banks languish in a valuation twilight zone. It’s a sign of the deep scepticism facing China’s financial sector.

from Breakingviews:

China Index: Waiting for the Party to start

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By Katrina Hamlin

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

The economy held more or less level in September, despite an unexpected drop-off in exports, according to Breakingviews’ alternative growth index. With new leaders set to reveal plans for the next decade at the “third plenum” later this month, the inertia could be short-lived.

from Breakingviews:

Three questions to ask of China’s ‘third plenum’

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By John Foley

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

Is reform a watchword for China’s new leaders, or just a cliché? The mysterious leadership conclave beginning on Nov. 9, known as the “third plenum”, should give a clue. A similar meeting in 1978 kicked off China’s opening up to foreign trade; at another in 1993 the socialist market economy was born. A senior Communist Party official said on Oct. 27 that this time round, under party chief Xi Jinping, there would be “unprecedented” economic and social reforms. For China-watchers, this raises three questions.

from Stories I’d like to see:

Breaking procurement rules to fix Healthcare.gov, the Red Cross and Sandy, and Westerners choking in China

1. Breaking procurement rules to fix Healthcare.gov?

In the weeks immediately following the failure of the federal government’s Obamacare exchange website, policy wonks who were inclined to attach larger meaning to the fiasco than the simple incompetence of those in charge pointed to how difficult and time-consuming government procurement is.

That’s why, according to this rationale, the same folks who were so inventive and effective in building campaign websites and mounting digital donation and get-out-the-vote campaigns couldn’t do the same when it came to launching their president’s highest-priority governing initiative.

from Breakingviews:

Mud sticks for China’s warring heavy industries

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By John Foley

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

In China, the stodgy world of construction equipment has become a hotbed of fraud accusations, espionage and attempted kidnapping. It shows what happens when fierce competition comes without clear rules.

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