Nov 6, 2013 09:37 UTC

France won’t meet its deficit target. No problem

Photo

By Pierre Briançon

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

The French government will not meet its target of shrinking the budget deficit to 3 percent of GDP by 2015, according to the European Commission’s latest forecasts. Some voices will again call for the Commission to show some nerve, and dare to discipline one of the EU’s big powers for once. This won’t happen, for political reasons. But it shouldn’t – for economic ones. The only sensible response to the projected higher deficit should be: “so what?”

Nov 6, 2013 06:20 UTC

U.S. investors’ love of tech defeats fear of China

Photo

By Peter Thal Larsen

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

For U.S. investors, love of technology has conquered a fear of China. Shareholders are snapping up shares of Chinese internet companies going public stateside. It’s a striking contrast with the recent past, when accounting scams and poor governance prompted many to shun mainland stocks.

Nov 5, 2013 08:15 UTC

China enters era of enlightened numerology

Photo

By John Foley 

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

China has revealed the symbolic number that drives its economic policy: 7.2 percent. That’s the minimum growth rate Premier Li Keqiang says is needed to ensure a stable job market. Fetishising numbers sounds unhealthy for a country raised on central planning, but for China it may be a useful indication of how leaders will balance reform with stability.

Nov 4, 2013 08:38 UTC

Hong Kong’s new marketing ruse: business trusts

Photo

By Una Galani

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

Business trusts are a new marketing ruse for Hong Kong bankers. Injecting whole companies into special-purpose vehicles sounds innovative: even tycoon Li Ka-shing has embraced the idea for the listing of his electricity assets in the territory which could raise $5 billion. But for all the hype, business trusts offer no benefits over a regular initial public offering. They’re mostly a tool for luring in yield-hungry investors.

Nov 1, 2013 16:23 UTC

Review: Dissecting America’s manufacturing retreat

Photo

By Kevin Allison

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

Those who believe that making physical things is a superior vocation will find themselves nodding through much of Vaclav Smil’s “Made in the USA”. Smil, a prolific Canadian academic, challenges the widespread view that in mature economies a shrinking factory footprint is inevitable – or even desirable. He blames short-termism and bad policy choices, not just changing economic tides, for the retreat of U.S. manufacturing. The book’s call for smarter industrial policy is appealing, but Smil comes too close to advocating protectionism.

Nov 1, 2013 07:01 UTC

Sony stumble gives Loeb headache and opportunity

Photo

By Peter Thal Larsen

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

Sony may have given Dan Loeb a headache – and an opportunity. The Japanese group’s quarterly loss knocked almost 12 percent off its market value by midday on Nov. 1 and raised questions about the company’s revival. Poor results from Sony’s entertainment and electronics arms suggest there’s limited upside from the spinoff that activist investor Loeb proposed earlier this year. However, it may give him a chance to push for more radical restructuring.

Oct 31, 2013 14:40 UTC

FX probe shows risks of benchmarks

Photo

By Dominic Elliott

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

A regulatory probe into allegations of rigging in foreign-exchange markets shows that the benefits of benchmark rates come with risks. Four investment banks – Barclays, Deutsche, Royal Bank of Scotland and UBS – confirmed on Oct. 29 and Oct. 30 that they were reviewing their FX trading practices. U.S., UK and Swiss regulators all said earlier in the month that they were investigating trading in currency markets. In anticipation of a potential backlash, Royal Bank of Scotland emailed select clients last week to reassure them about its FX rates-setting process, according to a person who has read the email.

Oct 31, 2013 05:53 UTC

China’s banks languish in valuation twilight zone

Photo

By John Foley

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

What if investors valued China’s big lenders the same way they do global banks? By one measure, lenders like ICBC and Bank of China would be worth twice what they are today. Instead, the country’s banks languish in a valuation twilight zone. It’s a sign of the deep scepticism facing China’s financial sector.

Oct 31, 2013 01:47 UTC

China Index: Waiting for the Party to start

Photo

By Katrina Hamlin

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

The economy held more or less level in September, despite an unexpected drop-off in exports, according to Breakingviews’ alternative growth index. With new leaders set to reveal plans for the next decade at the “third plenum” later this month, the inertia could be short-lived.

Oct 30, 2013 02:05 UTC

Three questions to ask of China’s ‘third plenum’

Photo

By John Foley

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

Is reform a watchword for China’s new leaders, or just a cliché? The mysterious leadership conclave beginning on Nov. 9, known as the “third plenum”, should give a clue. A similar meeting in 1978 kicked off China’s opening up to foreign trade; at another in 1993 the socialist market economy was born. A senior Communist Party official said on Oct. 27 that this time round, under party chief Xi Jinping, there would be “unprecedented” economic and social reforms. For China-watchers, this raises three questions.