Archive
Reuters blog archive
from The Great Debate:
China as peacemaker
Nuclear escalation on the Korean Peninsula demands creative solutions. With a 2,200-year history of non-aggression, China is in the best position to take the lead — and relieve the United States of a burden it has shouldered for too long.
In fact, no other nation has had as stable a pattern of world citizenship. Over two millennia, China has not attempted to conquer its neighbors or spread its system of government on any scale remotely comparable to the Romans, Mongols, British, Germans, French, Spanish, Russians, Japanese or even Americans. China does brutally resist the secession of Tibet, which it considers part of its ancient patrimony. But it has not grasped for lands beyond its historical borders.
There is no reason to think the Middle Kingdom has merely been biding its time. Indeed, if any nation can be said to have a long-term strategy, it is China. Premier Zhou Enlai, when asked what he thought of the French Revolution of 1789, allegedly replied, “It’s too soon to tell.”
China also has a 2,200-year record of authoritarian rule. Even so, it has become steadily more open — at its own glacial pace. China’s government is more responsive to its people now than it was under the Han, Ming or Qing dynasties, ending in 1911. After a long period of civil war in the first half of the 20th century, worsened by a brutal Japanese occupation, the dictator Mao Zedong restored order.
from Breakingviews:
Chinese credit alarms sound in the east
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Credit alarm bells are ringing in China’s east. Earnings from three of the country’s top four lenders show that while the national ratio of bad debts to loans is still falling, stress is building in coastal regions. Problems in an area rich in private sector businesses and manufacturing could be a national concern.
from Photographers Blog:
The sky of Beijing
Beijing, China
By Wei Yao
This past winter, Beijing and the entire northern part of China were repeatedly blanketed by thick haze, raising serious concerns among citizens and the government. Air quality in Beijing has mostly stayed above "very unhealthy" and "hazardous" levels. Therefore, how to clean up the sky became one of the most important subjects for the delegates at China’s annual National People’s Congress (NPC). As a photojournalist based in Beijing, the moment I was told I would be able to cover the NPC, I decided to shoot a series of photographs to illustrate this matter.
The first thing that came to mind was placing my camera at the same position to objectively document the sky of Beijing throughout the two weeks of the NPC. I immediately thought of the Tiananmen Gate with the giant portrait of China’s Late Chairman Mao Zedong, because for Chinese or foreigners, nothing says more about China and Beijing than Tiananmen Gate.
from Breakingviews:
China retailers stumble in pursuit of growth
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
China’s growth can be disruptive as well as lucrative. GOME and Li Ning, two of the country’s biggest retail brands, have both reported slumping sales and losses in a market that seems to be expanding. Shifting consumer habits have made competition fierce and profitability elusive.
from Global Investing:
Asia’s credit explosion
Whatever is happening to all those Asian savers? Apparently they are turning into big time borrowers.
RBS contends in a note today that in a swathe of Asian countries (they exclude China and South Korea) bank deposits are not keeping pace with credit which has expanded in the past three years by up to 40 percent.
from Global Investing:
After disappointing start to 2013, how will hedge funds catch up?
Despite the early-year rally in equity markets, some hedge funds seem to have had a disappointing start... yet again.
JP Morgan notes that the industry's benchmark HFRI index was up 2.8% by end-February, well below the 4.6% for MSCI All-Country index.
from Breakingviews:
Exposed bondholders suffer solar burns in China
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Who wants equity-like risk for a debt-like return? Investors in bust Chinese solar panel maker Suntech got something close when they bought $575 million of convertible bonds back in 2008. Even though the bonds remain unconverted, the company’s bankruptcy could leave them with pennies - little better off than regular shareholders. Yet the lessons appear to be going unheeded.
from MacroScope:
Yield is king in China’s ‘dim sum’ offshore yuan bond markets
A return to China's offshore yuan bond markets, or "dim sum” as they are colorfully known in Hong Kong, may be sweet for Gemdale, a mainland property developer. But not all fund managers are smiling. The company raised five-year money at 5.63% amounting to 2 billion yuan. Not bad, considering that last July, it raised a lesser sum for a shorter tenor while coughing up nearly double of what it paid this time around. Add the fact that it did so by keeping to the same weak bond covenant and Gemdale seems to have pulled off a stunner.
But Gemdale doesn’t seem to be the only one. In recent days, issuers with weak bond covenants have discovered a ready market for their debt and at much cheaper rates. In theory, bond covenants can be divided into two halves: affirmative and negative ones. The former promises to pay bond holders on time while the latter forbids it from exceeding certain financial ratios such as interest paid/EBITDA, debt to equity, etc. And of course, they are secured by the company's assets or backed by bank guarantees or letters of credit.
from The Great Debate:
‘Post-Communist’ Russia and China remain remarkably the same
For a Russian to live in Beijing is to experience time travel. Things long gone in Russia, or stuffed into kitschy theme bars to draw tourists, still appear in China with no sense of irony. There are endless displays of hammer-and-sickles, Red stars, and exhortations to Obey the Communist Party. There’s the rhetorical deification of the worker and the peasant. “Public-security volunteers,” elderly men and women with red arm-bands and a lot of time on their hands, lounge on little folding stools, sizing up passers-by. There are five-year plans, and front-page headlines screaming “Socialist path reaffirmed”. I thought I left all of this in the 1980s’ Leningrad. But no, it’s all still here in Beijing, instantly recognizable even behind Chinese characters that give it a new spin. All of which makes it tempting to think how Russia and China have changed over the last 20 years.
But in fact the opposite is true: their political systems remain remarkably similar. Both ditched Communism a while back. The only difference is Russia ditched the trappings while China held onto them. The system that emerged in both places operates with fewer overt ideological constraints but with a singular mission: the self-perpetuation of the ruling elite.
from Breakingviews:
Mining saga highlights pitfalls of Chinese M&A
By Peter Thal Larsen
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Sundance Resources is a case study in what ails Chinese-led takeovers. The Australian miner’s deal to sell itself to Hanlong Mining for $1.4 billion is under pressure after its suitor’s chairman was apparently arrested. The 18-month saga highlights the hurdles facing Chinese bidders, and explains why suitors are often met with scepticism.
