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from Breakingviews:

Hong Kong democracy debate puts business on spot

By Peter Thal Larsen 

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

Hong Kong’s democracy debate has put Western businesses on the spot. Hundreds of thousands of citizens are engaged in a public showdown over a new system for conducting elections in the former UK colony. The standoff has prompted questions about Hong Kong’s future as an efficient and well-ordered financial centre. But warnings of potential disruption miss the point.

Business leaders are worried about Hong Kong’s “Occupy Central” pressure group, which has pledged to stage demonstrations in the central financial district. Unlike the anti-capitalist movement which shares part of its name, the group is not targeting banks. Its concern is the system for electing Hong Kong’s next chief executive, which is due to be conducted by universal suffrage. China wants voters to choose from a carefully vetted list. Occupy Central wants the nomination process open to the public.

Beijing has already dismissed the idea, which more moderate democrats accept is a non-starter. Still, a large number of people have endorsed it. Almost 800,000 voters – more than a fifth of Hong Kong’s electorate – participated in a referendum organized by Occupy Central this month. Hundreds of thousands joined an annual pro-democracy march on July 1.

from Breakingviews:

China index: economy looking slower than slow

By Katrina Hamlin

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

Our index fell to 88.6 in May, its lowest reading since 2009. Exports recovered, but the domestic economy was weaker: truck sales and rail freight volumes fell, while growth in sales of residential property was at its lowest level in over a year.

from Breakingviews:

Private equity’s bad habit: Asian minority stakes

By Una Galani

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

Private equity firms have developed a bad habit in Asia. They are investing record amounts in minority stakes in listed companies. Investors dislike such deals because they can buy the shares themselves. History also suggests that giving up control is fraught with risks.

from John Lloyd:

Are we at war? And why can’t we be sure anymore?

Britain's Prime Minister David Cameron poses for group photograph taken with G8 leaders at the Lough Erne golf resort in Enniskillen

The question -- “Are we at war?” -- seems absurd. Surely, we would know it if we were. But maybe we’re in a new era -- and wars are creeping up on us.

In the decade after the collapse of communism, the United States and its allies seemed invulnerable to challenges, from military to technological to economic. All changed in the 2000s, the dawning of the third millennium: an Age of Disruption. Russia, under a president smarting publicly at the loss of the Soviet empire, has now delivered an answer to decline: aggressive claims on lost territories.

from Anatole Kaletsky:

World War One: First war was impossible, then inevitable

British troops advance during the battle of the Somme in this 1916 handout picture

Why does the assassination of Archduke Franz Ferdinand -- the event that lit the fuse of World War One 100 years ago Saturday -- still resonate so powerfully? Virtually nobody believes World War Three will be triggered by recent the military conflicts in Ukraine, Iraq or the China seas, yet many factors today mirror those that led to the catastrophe in Sarajevo on June 28, 1914.

The pace of globalization was almost as dramatic and confusing in 1914 as it is today. Fear of random terrorism was also widespread -- the black-hatted anarchist clutching a fizzing bomb was a cartoon cliché then just as the Islamic jihadist is today. Yet the crucial parallel may be the complacent certainty that economic interdependence and prosperity had made war inconceivable -- at least in Europe.

from Breakingviews:

China’s subway splurge only half on right track

By John Foley

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

Take a trip on Beijing’s subway during rush hour and it’s clear that building more lines is a good idea. Asking international capital markets to pay for them, though, is not. Beijing’s issue of a $190 million bond to finance urban transit has been a hit with investors. But in general, public funding for public transport still looks the best route.

from Breakingviews:

Hollywood’s hopes in China rest on Youku

By Rob Cox

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

Look around the subway in Beijing or Shanghai and maybe nine of 10 passengers are watching videos on their mobile devices. Chances are most of them are watching content delivered to them by Youku Tudou. The country’s leading internet television operator streams 400 million videos a day. In that sense, Youku is Netflix and YouTube - plus Comcast and Liberty Media - stuffed into one dumpling. It is also the nexus for Hollywood’s high hopes in the Middle Kingdom.

from Photographers' Blog:

Heshan: a poisonous legacy

Heshan, China

By Jason Lee

Heshan, a village with a population of about 1,500 in China’s Hunan province, is sometimes given the grim label: “cancer village”.

Located some 1,200 kilometers (770 miles) from Beijing it stands in an area rich in realgar, or arsenic disulphide.

from Counterparties:

In Beijing we trust

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China’s credit woes are bubbling up into the news again (previously here and here).

The World Bank’s top economist, Kaushik Basu, is worried about China’s reliance on credit to fuel growth. He said last week that eventually credit will catch up with it: “We’ve seen that in the U.S. in 2008, and China may have to face up to that sometime in the coming year, or couple of years because of its bloated finances.” Back in April, the IMF’s Global Stability Report warned that China was risking a financial crisis if it didn’t rein in borrowing, and that the country should settle for lower growth in order to save itself from credit calamity (the WSJ has a good summary of the report). “Pockets of stress have already begun to emerge, particularly in the trust sector, with spillovers to other parts of the financial system,” the report says.

from Hugo Dixon:

Is Greece losing its reform drive?

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own. 

Is Greece losing its reform drive? Prime Minister Antonis Samaras has stuck to a harsh fitness programme for two years. But just as it is bearing fruit, he has sidelined some reformers in a reshuffle. There is only one viable path to redemption for Athens: stick to the straight and narrow.

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