Breakingviews

Coal’s ascendancy to leave ailing U.S. miners in pit

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

Coal’s ascendancy looks set to leave already ailing U.S. miners stuck in a pit. Within five years, the black rock is likely to replace oil as the world’s top energy source, according to the International Energy Agency. That should be good news for America’s miners, which are sitting on 28 percent of the planet’s coal. But they’re ill placed to do well from the boom.

Review: China’s red capitalism needs retooling

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

China’s authoritarian capitalism may be a victim of its own success. It is getting harder to satisfy a population that is devoid of ideology and which demands non-stop lifestyle improvements. Powerful state-owned companies are consuming the fruits of reform. Moreover, the system’s lack of checks and balances has led to widespread corruption. For China to thrive, it needs change its one-of-a-kind development model. That is the persuasive argument made by journalist-turned businessman James McGregor in his new book, “No Ancient Wisdom, No Followers”.

Mario Draghi’s three challenges

By Neil Unmack

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

Mario Draghi’s words were enough to keep the euro zone together in 2012. In 2013, his actions will have to speak louder to consolidate the fragile state of the monetary union. The president of the European Central Bank will have to make good on his bond-buying pledges, guide the new common banking regulator’s tentative first steps, and show what he can do to foster growth in the region.
Draghi’s mere promise of “outright monetary transactions” (OMT) – unlimited buying of the bonds of indebted countries struggling with highs yields – were enough to calm markets. But it raises a problem: a country such as Spain is now under less pressure to request that new type of bailout. Yet Spanish borrowing costs haven’t come down enough and still hurt the economy. Draghi’s task is to convince Madrid to accept the ECB’s intervention. Even then, he won’t be in a risk-free zone. He must make sure that Madrid won’t slow down on reforms. Then there’s the question of how northern European countries will react if bond-buying becomes massive.

China’s hukou belongs on history’s scrapheap

By John Foley

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

China’s future lies in building bigger, better cities – then giving everyone a fair chance to live in them. For over 50 years the “hukou” system of household registration has prevented free movement, and controlled where and how people live. This inhumane system is changing, but too slowly. It belongs on history’s scrapheap.

U.S. doesn’t need Washington for economic stimulus

By Agnes T. Crane and Christopher Swann
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

America doesn’t need Washington for an economic stimulus. President Barack Obama lobbied Congress for a $50 billion investment in infrastructure as part of the fiscal cliff battle, but it’s been stymied by gridlock. A contentious corner of the energy industry is having much more success, though. Shale gas and oil production pumped three times that amount into the economy in 2012, with more to come. It won’t cure America’s ills, but it should ease the pain.

US housing doesn’t need another government bailout

By Agnes T. Crane

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

America’s housing market doesn’t need another government bailout. But the White House is mulling plans to rescue homeowners trapped by underwater mortgages and above-market mortgage rates by allowing them to refinance into cheaper government-backed loans. Luckily, its latest musings look like a pipe dream.

Mexico may teach U.S. a lesson on good government

By Raul Gallegos

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

Mexico may teach the United States a lesson on good government in 2013. Latin America’s second-largest economy needs to enact key fiscal and energy sector reform. That might sound hard since its political parties have little history of working together. But they look set to reach a compromise with far less rancor than their counterparts north of the border.

Washington may finally take up mortgage reform

By Daniel Indiviglio

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

America’s lawmakers may finally take reforming housing finance seriously in 2013. Assuming Congress settles the deficit debate, sorting out the government’s role in funding home loans should be its next stop. And a number of obstacles are dissolving.

Modi’s Gujarat win doesn’t mean he will rule India

By Andy Mukherjee

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

Narendra Modi’s resounding election victory in the western Indian state of Gujarat has made Indian businessmen optimistic. Many see his win, the third in a row, as a sign that the centre-right leader with a reputation for effective administration could be ruling the nation in 2014. But a chequered past, an autocratic personality and the peculiarities of India’s coalition politics make Modi less than a shoo-in.

Fed’s foreign bank crackdown is price of stability

By Agnes T. Crane and Daniel Indiviglio

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The Federal Reserve’s unilateral crackdown on foreign banks is necessary. The regulator’s requirement that overseas lenders properly capitalize their U.S. arms is a prudent way to protect the local and global financial system. The Fed’s approach could prompt other regulators to follow suit. But the fear that fragmentation could stifle global banking looks overblown.