Archive

Reuters blog archive

from Breakingviews:

Japan risks consumer electronics death spiral

By Peter Thal Larsen

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

“We are among the losers in consumer electronics.” That frank assessment by Panasonic president Kazuhiro Tsuga sums up the state of Japan’s once world-beating electronics industry. The economy is partly to blame for slumping demand for Japanese gadgets, but so are rivals like Apple and Samsung. The worry is that the financial squeeze undermines product development, leaving Japan ever further behind.

Quarterly earnings, released this week, revealed big losses and low expectations. Panasonic - Japan’s largest corporate employer – delivered the biggest shock, knocking 7 percent off its full-year revenue forecast and predicting a net loss of 765 billion yen ($9.5 billion). Much of that is due to writing off intangible assets, like goodwill, that do not affect the company’s cash position. But the prospect of a fourth loss in five years also forced it to take a less optimistic view of the value of accumulated tax losses. Cancelling its dividend for the first time in sixty years is another signal of Panasonic’s predicament.

It is not alone. Although Sony stuck to its full-year forecast, the electronics group is heading for a second year of losses. And while revenue was up slightly in the six months to the end of September, it expects to sell fewer flat-screen televisions, digital cameras and hand-held PSP consoles this year that previously estimated.

from Breakingviews:

Europe, China holding back Asian export recovery

By Wayne Arnold

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

Asia’s export engine could remain stuck in neutral as long as Europe and China are slowing. An uptick in September exports has buoyed hopes for a U.S.-led rebound in regional trade. But in the past decade, Asian economies have shifted focus to Europe and responded to China’s rise by supplying the manufacturing juggernaut. A U.S. upturn alone won’t be enough.

from Ian Bremmer:

America’s way or Huawei

If you watched the third presidential debate this week, you got the sense that in the U.S.-China relationship, there are only good guys and bad guys, and all the bad guys are in China. The Americans are the valiant defenders of well-paying jobs; the Chinese are the ones who make tires so cheap it hurts the Americans. The Americans have a currency so free it’s the envy of the world; China’s is so manipulated it stunts competition the world over. But the squabbling isn’t limited to what you heard at the debate or just the two governments. It’s also happening between governments and private companies.

For years, Huawei, a Chinese telecom giant, has been trying to break into the U.S. market. Huawei wants to provide communication infrastructure to the U.S., but the U.S. wants to make sure Huawei, founded by former members of the People’s Liberation Army, isn’t actually a spy organization. Huawei claims to be just like any other Silicon Valley tech giant. U.S. intelligence agencies, despite finding no evidence of spying, view Huawei’s technology as too vulnerable to hackers. The House Intelligence Committee classified Huawei as a national security threat. State capitalism and the challenge it poses have expanded enough that the government is officially worried about them.

from The Great Debate:

America’s way or Huawei

If you watched the third presidential debate this week, you got the sense that in the U.S.-China relationship, there are only good guys and bad guys, and all the bad guys are in China. The Americans are the valiant defenders of well-paying jobs; the Chinese are the ones who make tires so cheap it hurts the Americans. The Americans have a currency so free it’s the envy of the world; China’s is so manipulated it stunts competition the world over. But the squabbling isn’t limited to what you heard at the debate or just the two governments. It’s also happening between governments and private companies.

For years, Huawei, a Chinese telecom giant, has been trying to break into the U.S. market. Huawei wants to provide communication infrastructure to the U.S., but the U.S. wants to make sure Huawei, founded by former members of the People’s Liberation Army, isn’t actually a spy organization. Huawei claims to be just like any other Silicon Valley tech giant. U.S. intelligence agencies, despite finding no evidence of spying, view Huawei’s technology as too vulnerable to hackers. The House Intelligence Committee classified Huawei as a national security threat. State capitalism and the challenge it poses have expanded enough that the government is officially worried about them.

from Breakingviews:

Japan exporters should fear slowdown, not boycott

By Wayne Arnold

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

Squabbles over remote islands have sparked a Chinese backlash against Japanese brands. But China’s slowing economy is having an even bigger impact on Japan’s exports. And while China has toppled the U.S. as Japan’s biggest market, both nations face a common economic enemy in the form of plunging demand from Europe.

from Global Investing:

Ireland descends from risky debt heights

Photo

Good news for Europe as the cost for insuring sovereign debt against default fell in the third quarter of 2012, according to the CMA Global Sovereign Credit Risk report.

Ireland slipped out of the 10 most risky sovereigns for the first time since the first quarter of 2010 according to CMA, making space for Lebanon to enter the club of the world's ten most risky sovereign debt issuers.

from Breakingviews:

Softbank-Sprint tie-up gets bad signal from market

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

By John Foley

Softbank chief executive Masayoshi Son has received a strong signal from investors. They wiped $6.2 billion in value off the Japanese telecoms operator’s market value on Oct. 12 after it confirmed it was in talks with U.S. rival Sprint Nextel. That’s three times more than U.S. investors added to Sprint’s worth the previous day. No wonder: a takeover would be a financial stretch for Softbank, and could preclude other deals closer to home.

from Breakingviews:

BOJ’s conundrum is how to be more irresponsible

By Andy Mukherjee

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

The Bank of Japan has a conundrum: how to make a credible commitment to recklessly printing more money. The central bank wrote the primer on unconventional monetary policy a decade ago when it pioneered quantitative easing. But as other central banks have embraced loose money, the BOJ has become an increasingly forlorn figure in a crowded rogues’ gallery.

from Breakingviews:

New recall narrows Toyota’s recovery window

Photo

By Wayne Arnold

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

It may take just 40 minutes to replace the gizmo responsible for Toyota’s latest embarrassment, but with 7.4 million cars to fix, that’s 565 years of mechanic time. Actually it is neither the first nor the most serious of Toyota’s recent difficulties. But the Japanese automaker’s problems are beginning to look unending.

from Breakingviews:

China’s IMF boycott undermines quest for clout

By John Foley

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

If China wants a bigger say at the IMF, boycotting the fund’s meeting in Japan is the wrong way to get it. The head of the central bank, Zhou Xiaochuan, withdrew on Oct. 10, amid a territorial dispute between the two countries. Yet the IMF is supposed to be about finance, not border politics. If China doesn’t agree, maybe it isn’t ready for a bigger role.

  •