Sep 4, 2013 04:22 UTC

China’s bad debt could leave $500 bln equity hole

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By John Foley

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

China’s bad debts could blow a $500 billion hole in bank balance sheets. That’s roughly how much extra equity the eleven biggest lenders might need if 10 percent of their loans went sour, according to a Breakingviews calculator. Though the chairman of ICBC, China’s biggest lender, thinks dismal bank valuations are “unfair”, the malaise is well deserved.

Sep 3, 2013 08:35 UTC

The lessons for China from Japan’s lost decade

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By Andy Mukherjee

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

Is China condemned to suffer a Japanese “lost decade”? Its economy today has three big similarities with Japan in the late 1980s: High and rising debt, diminishing export competitiveness and an ageing society. China can avoid slipping into Japan’s deflationary hole, but only if it learns from Tokyo’s failure to cleanse its banking system.

Sep 2, 2013 08:26 UTC

Emerging market currency rescue is a pipe dream

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By Andy Mukherjee

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

Can emerging markets fight back against currency speculators? An idea floated by India to mount a joint defence has a certain charm. After a rout in the rupee the past three months, New Delhi wants other developing countries to help in a coordinated intervention in offshore foreign exchange markets, Reuters reported on Aug. 31. In reality, it sounds unworkable.

Aug 29, 2013 09:28 UTC

Currency market’s rude wakeup call stirs Indonesia

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By Andy Mukherjee

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

It took a rude wakeup call from the currency market to stir Indonesia’s central bank. At an emergency meeting on Aug. 29, the monetary authority raised its benchmark and overnight deposit rates. It’s a decision Bank Indonesia should have made at its last official gathering less than two weeks ago. An obsession with economic growth stayed its hand.

Aug 28, 2013 14:27 UTC

West faces only high-cost options in Syria

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By Una Galani

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

Western powers readying to strike Syria must weigh the price of doing nothing against the likely negative impact from an intervention. The form of the military action will matter, but in this sectarian war, all options are fraught with risks.

Aug 28, 2013 09:41 UTC

China’s consumers aren’t living up to sales pitch

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By John Foley

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

Consumer brands in China are finding their rewards aren’t quite as advertised. Growth in purchases of a wide range of goods has slowed sharply over the past year, and companies ranging from Samsonite to Apple are reporting disappointing Chinese sales figures. Consumers in the world’s second-largest economy will have their day, but the idea they alone can sustain growth looks threadbare.

Aug 27, 2013 09:46 UTC

China’s debt molehills could turn into mountains

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By John Foley

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

The mountains are high, and the shareholders are far away. China’s banks are reporting results that suggest their bad debts are under control and earnings healthy. But where investors don’t easily see them, risks are growing. It’s at the local level that the problems with China’s debt build-up could escalate most rapidly.

Aug 26, 2013 09:15 UTC

Asia sell-off will expose weak corporate defences

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By Peter Thal Larsen

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

Generals usually fight the last war, not the current one. Investors have a similar mindset. In Asia, a market sell-off has raised concerns about a re-run of the financial calamity of 1997-98. Though most of the region’s economies are in better shape this time, corporate leverage has risen quickly, and it looks like some companies have forgotten the lessons of history.

Aug 22, 2013 05:05 UTC

Fed liquidity curbs will act as Asia’s detox plan

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By Andy Mukherjee

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

The Federal Reserve is forcing Asia to kick its addiction to hot money. The prospect of higher U.S. interest rates had made the region’s dwindling trade surpluses look an increasingly dangerous habit. Though markets may be turbulent, pricier local money or cheaper currencies will improve the trade balance for most Asian countries.

Aug 21, 2013 09:23 UTC

India in depth: Let rupee sink to save the economy

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By Andy Mukherjee

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

India’s failing defence of the rupee is doing more harm than good. It’s time New Delhi left the plunging currency to market forces and shifted its focus to boosting exports and investment.