Breakingviews

Japan’s corporate tax cut could harm Abenomics

June 25, 2014

Prime Minister Shinzo Abe wants to prove his reform credentials by slashing the levy below 30 pct. But Japan’s tax-to-GDP ratio is low, and public debt is high. A concession for companies could mean a bigger levy for consumers. That would undermine Abe’s anti-deflation campaign.

Hollywood’s hopes in China rest on Youku

June 24, 2014

The Chinese website streams 400 mln videos a day, making it Netflix, YouTube and Comcast stuffed into one dumpling. For all that, Youku loses money. Yet the interests of Tinseltown and the Chinese Communist Party may be converging around its business model.

Iraq troubles are unlikely to bring new oil crisis

June 24, 2014

The continued violence looks like a harbinger of a sharp cutback from one of the world’s major oil producers. But the bulk of Iraq’s production is still secure. The Middle East is clearly becoming less stable, but it would take a cascade of problems to create a big price shock.

Investors beware: France will get more erratic

June 23, 2014

Paris is to buy most of Bouygues’ stake in Alstom in an expensive concession by François Hollande to his protectionist economy minister. Weakened by his unpopularity, the president seems increasingly unable to bring cohesion to his own cabinet. It can only get worse.

Alibaba is case study in U.S.-China legal gulf

June 23, 2014

As the Chinese ecommerce giant prepares for its U.S. IPO, a congressional group is flagging the dangers in its ownership structure. Uncertainty in PRC law is to blame. The certainty that American authorities have the right to pursue graft in China is another less obvious risk.

GE scores a Pyrrhic victory in France

June 20, 2014

The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.

Review: ‘Leftover Women’ may hinder China’s growth

June 20, 2014

Women’s rights have suffered from China’s fixation on social harmony, says Leta Hong Fincher in a new book. She exposes an injustice, but that’s not enough to force change. What might is the threat of a slowing economy.

Tranquil markets may lead emerging nations astray

June 19, 2014

The return of calm to bond markets is not an unalloyed boon for developing economies. With exports to rich nations stalling, many may be tempted to make use of easy-money conditions to inflate bubbles in domestic assets. Any pickup in GDP growth will be illusory.

China Macau tolerance won’t last forever

June 17, 2014

The scale of the transformation of this former Portuguese colony into China’s gambling den is extraordinary. Each year it creates the equivalent of a new Las Vegas in revenue. But Beijing will eventually exercise more sway over the house’s winnings. Glimmers are already evident.

Gazprom/Ukraine dispute is proxy for Putin’s whims

June 16, 2014

The Russian energy group will deliver only pre-paid gas to Ukraine, after talks on $4 bln of overdue bills collapsed. Combine that with renewed hostilities by Russian separatists in the east of the country, and markets were premature in believing that the Ukraine crisis has ended.