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from Breakingviews:

Coal typifies China’s reform: it’s hard and dirty

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By John Foley 

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

Coal is much like China’s reform challenge: hard and dirty. Even as politicians fret about the country’s chronic smog, they approved 100 million tonnes of new mining capacity in 2013, six times the amount for the previous year. That will add to the 300 million tonnes or so already due to come on stream in 2014. The habit is proving difficult to kick.

China’s coal output has almost tripled since 2000, and at 3.7 billion tonnes accounts for half of global supply. The sector is inefficient, fragmented and unsafe. The State Council has vowed to shut down at least 2,000 of the country’s 12,000 mines, and be more sparing with approvals for new ones. CLSA estimates about 300 million tonnes of Chinese coal supply was withdrawn from the market in 2012, compared with peak second-quarter production levels, as the coal price fell.

But history and geology are in coal’s favour. The stuff is abundant, and more reliable than hydroelectric or wind power. Chairman Mao proclaimed smoke stacks as a symbol of progress. Meanwhile, companies are still investing: Shaanxi Coal, one of the biggest producers, kicked off a 9.8 billion yuan ($1.6 billion) share offer on Jan. 10.

from Breakingviews:

China still means the world to car makers

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By Ethan Bilby

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

China loves to do things big, and that includes buying cars. The country accounted for 85 percent of the expansion in the global automobile market last year. China’s growth may down-shift to 10 percent this year, according to consultancy IHS, as top cities introduce caps on new car-buying. Even then, it remains the world’s most important car market.

from The Great Debate:

Where does Britain stand in the global economic race?

Following the international financial crisis of the late 2000s, the world’s financial leaders have been working towards a standardized banking system that will strengthen banks at an individual level, and thus improve the banking sector’s ability to survive stress when it occurs.

In 2010 the Basel Committee produced a third accord outlining a set of regulations, with the goal of solving the banking system's ongoing problems. Since then the conversation has yet to cease over whether enough has been done, since the peak of the crisis in 2008, to ensure a stable financial environment that supports growth on an international scale.

from Breakingviews:

Difficult second coming pays off for Chinese IPOs

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By John Foley 

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

Free money, anyone? China’s equity markets have just reopened after a fourteen-month hiatus, starting with a batch of eight companies planning initial public offerings in the week ending Jan. 10. With so much pent-up demand, and rules in place to protect investors from losses, exuberance is inevitable. But better to have frothy IPOs than none at all.

from Breakingviews:

China conducts monetary policy in the shadows

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By John Foley 

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

China is engaging in a shadowy version of monetary policy. Recent tinkering by the People’s Bank of China, which has pushed up rates, looks targeted at parts of the “shadow banking” sector. This kind of variegated tightening might just work, simply because China’s financial system is so dysfunctional.

from Breakingviews:

Asia is ripe for a brewers M&A brawl

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By Una Galani

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

It is a seller’s market in the last frontier for beer. Asia Pacific is the last region not dominated in profit terms by the world’s four biggest brewers – Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg – according to Bernstein Research. Consumption of suds is growing fast, and for-sale assets are hard to find. The coming year may see new owners for Philippine brewer San Miguel and South Korea’s Oriental Brewery. The real prize may be in China, the world’s biggest beer market by far.

from Breakingviews:

Local audit highlights China’s debt dilemma

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By Peter Thal Larsen 

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

China is being a bit more precise about its debt problem. A long-awaited audit of local government borrowing shows that provinces, towns and villages collectively owed 17.9 trillion yuan ($2.96 trillion) at the end of June, including contingent liabilities. The state will now have to decide which of those debts it wants to stand behind. Its approach will offer some hints about the importance of leverage for China’s economic growth.

from Breakingviews:

China index: Slowdown looks home-grown

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By Katrina Hamlin

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

China’s economy decelerated further in November, according to Breakingviews’ alternative index. Lower truck sales, steel output and rail freight volumes suggest sluggish demand. House prices and pollution were up, but their contribution is a sign that growth is far from healthy.

from Breakingviews:

Beijing will block a big overseas deal in 2014

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By Ethan Bilby

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

China will seek its own GE-Honeywell moment in 2014. European regulators asserted their growing power over global competition when they blocked the merger of the two U.S. industrial companies in 2001. Beijing’s antitrust watchdog is already giving increasing scrutiny to tie-ups even when both companies are foreign. The desire to show its economic might could see it block a deal outright.

from Breakingviews:

China’s banks are coming – this time for real

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By John Foley 

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

China’s banks are racking up foreign assets, driven by trade flows, and the country’s corporate diaspora. Even at the current slow pace, what today looks like “following the client” could soon become “following everyone’s clients”.

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