CITIC goes slowly on reform with $5.1 bln placing

May 15, 2014

The Chinese group’s Hong Kong subsidiary will sell shares to 15 investors as part of a union with its state-owned parent. That allows CITIC to keep its stock market listing. Yet most of the buyers are also backed by the government. A deep overhaul of state firms looks a way off.

Japan index: Wages bigger worry than spending

May 13, 2014

With the sales tax rising from April 1, the shopping spree that pushed the Breakingviews Abenomics Index to a 12-year high in March has ended. But sluggish wages are a bigger threat than a consumption freeze. If pay disappoints, the spending gloom may become more persistent.

Australia’s mistimed austerity could boomerang

May 12, 2014

Prime Minister Tony Abbott wants to raise taxes on top incomes and cut welfare. But tightening the government’s belt as the mining boom fades could prompt people to consume less, or borrow more against fickle housing wealth. With public debt low, a fiscal correction is untimely.

ECB abets risky passion for peripheral debt

May 9, 2014

A promise of monetary easing is pushing down Italian, Spanish, Irish, and Portuguese bond yields, some to record lows. A harsh form of market discipline forced these countries to accept bitter medicine in crisis times. The regimen may now be too lax to compel them to get fitter.

Stanford’s snub to coal typical of Silicon Valley

May 8, 2014

The black rock is an easy target for the university’s $18.7 bln endowment. Yet shouldn’t the principle behind it apply equally to oil producers, even local titan and Stanford donor Chevron? Like some of its grads, the university seems willing to shun certain evils only so far.

India’s wobbly economy needs a factory revival

May 6, 2014

The economy perches unsteadily on software exports, hot money flows and fiscal grants to villages. All three stymie manufacturing, which is necessary to create the millions of jobs India needs. A Narendra Modi government could change this with Japanese-backed industrial zones.

Review: The UK’s EU choice is safety or adventure

May 2, 2014

Should the UK leave the EU? Hugo Dixon, founder of Breakingviews, answers “The In/Out Question” with a firm “no.” He is mostly persuasive, at least for the short term. But he exaggerates potential British influence inside the EU - and may be too grim about Britain’s fate outside.

Abe’s small hits weightier than big trade miss

April 28, 2014

The Japanese prime minister’s failure to cut farm tariffs has delayed a key U.S. trade pact. But that doesn’t mean he is unable to open up Japan’s economy. Easier land and labour laws, greater tolerance of foreign workers and lower medical costs add up to a strong reform push.

Review: India’s Singh wasn’t king, Modi could be

April 25, 2014

Sanjaya Baru’s “The Accidental Prime Minister” is an insider’s account of how Sonia Gandhi defanged the reformist Manmohan Singh. The ensuing gloom, though, could spell glory for Narendra Modi, who will want to vest more power in India’s top job. That’s also what investors want.

Review: Hustling helps Africa’s partial success

April 17, 2014

Dayo Olopade’s “The Bright Continent” describes “kanju,” the hustling, striving and rule-breaking that make modern Africa work. The canny invisible hand can outwit the dead hand of corrupt bureaucracy. Sadly kanju makes the continent a tough place to do fully organized business.