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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 Full Focus:

Hong Kong demands democracy

Thousands of pro-democracy protesters block Hong Kong streets and defy volleys of tear gas and police baton charges in one of the biggest political challenges for China since the Tiananmen Square crackdown 25 years ago.

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 The Great Debate:

Why work with India’s new leader? It’s the economy, stupid

India's Prime Minister Modi gestures while speaking at Madison Square Garden in New York

Great powers sneak up on you.  While Washington has been preoccupied with a burning Middle East, Russia behaving badly and, to a lesser extent, the rise of China, U.S. relations with India have slipped down the diplomatic priority list. In coming decades, however, enormous, unwieldy India will likely be the United States’ most important continental partner in Asia.

On Sunday, 19,000 spectators were enthralled at a rock-star-like rally for India’s new prime minister, Narendra Modi, in Madison Square Garden in New York.  Additional screens were set up in Times Square.  The Rolling Stones and U2 do not command a similar reception. Responding to chants of “Modi, Modi, Modi,” the prime minister promised to “form the India of [his fans’] dreams.”

from Breakingviews:

World should steel for peak China demand

By John Foley

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

Markets should steel for peak China demand. Consumption of the metal in the People’s Republic fell for the first time this century in August, an industry official said on Sept. 25. If the decline proves anything more than temporary, it could throw global markets off kilter.

from Breakingviews:

Sinopec’s petrol station revamp is an uphill job

By Ethan Bilby

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

Chinese oil giant Sinopec wants to sell more from its 23,000 pump-side stores. But as a new Breakingviews calculator shows, even a dramatic increase in non-fuel sales won’t do much to lift the $58 billion valuation that outside investors have put on the business.

from Compass:

To build a coalition against Islamic State, U.S. should try a little humility

U.S. President Barack Obama chairs the U.N. Security Council summit in New York

When President Barack Obama assumed the presidency of the United Nations Security Council Wednesday, he summoned the full weight of U.S. power to a cause with seeming universal appeal: defeating the barbarism of Islamic State -- or, as Obama calls the militant group, Islamic State in Syria and the Levant (ISIL).

Much of the world, however, will question how Washington can hope to achieve this without launching a wider political agenda for accountable government in the failing states of the Arab world.

from Breakingviews:

China rich list misses most valuable asset: status

By John Foley 

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

What’s the most precious asset for China’s plutocrats? Not diamonds, or prime real estate, or even a stake in a richly valued internet company. The currency that really matters is status. That’s something rankings like the new Hurun Report of China’s richest individuals struggle to measure.

from MacroScope:

Middle East war takes another step

Shi'ite fighters from Mahde Army launch rockets during heavy fighting against Islamic state members at Bo Hassan village, near Tikrit

The United States and some Gulf allies have launched air strikes inside Syria against Islamic State militants.

A combination of fighter, bomber and Tomahawk attack missiles sounds like a formidable barrage so if intelligence about where the militants are is good, a significant blow could have been dealt.

from Breakingviews:

Australia at sharp end of China outbound ambition

By Una Galani

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

The most surprising thing about a walk through central Sydney is China. Its influence is everywhere. Activists protest 1989’s Tiananmen Square massacre near the Sydney Opera House. A bilingual Mandarin school is under construction in the affluent Chatswood district. And the effect of Chinese money on the property market has become a dinner party favorite.

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