Breakingviews

Wen passes ball on China’s needed reforms

March 5, 2012

The outgoing premier cut China’s growth target in his last parliamentary address, but gave little news on big issues like inequality, the yuan and food safety. A focus on stability makes sense, but the longer important reforms are ignored, the more costly they may be to implement.

Lucrative Sino-Gulf ties will survive Syria clash

March 6, 2012

China and Gulf Arab countries have different views on whether Assad should be forced out. But they also have $90 bln in trade. It’s in neither’s interest that this is disrupted. If the Syrian conflict escalates, Beijing may need to further soften its position.

Spain replaces Italy as bad boy in euro class

By Hugo Dixon
March 7, 2012

Since August, Italy has been the big troubled euro economy, with higher yields than Spain. But Rome’s borrowing costs are now a touch tighter than Madrid’s. Economics and politics are responsible for the flip. The gap could widen further – at least until Italy’s next elections.

Japan quake anniversary shows lessons unlearned

March 7, 2012

The economy bounced back after 2011’s disaster, but Tokyo squandered a chance to push through painful economic reform. Now growth is slowing. That leaves Japan in the same state it was in before the earthquake – only deeper in debt and one year closer to its moment of reckoning.

UK would gain from intelligent industrial policy

March 8, 2012

British politicians have long shied away from coherent long-term economic plans. But ad hoc decisions on technologies, infrastructure, immigration and banking are not good enough. Vince Cable, the business secretary, is right to call for a new vision.

Just let housing regulator DeMarco do his job

March 8, 2012

The knives are out for Frannie’s overseer for not cutting principal on underwater home loans backed by the agencies. Borrowers would hail him a hero if he changed his mind. But he has a broader duty to taxpayers. His stance as a clear-eyed regulator deserves praise, not punishment.

Purges and paranoia weaken China’s crisis defences

March 15, 2012

The ousting of Party hotshot Bo Xilai after a rebuke by China’s Premier Wen shows divisions run deep. Modernisation is a sticking point: reformists see it as a cure for unrest, while conservatives see it as a cause. A divided China can still grow, but may not handle shocks well.

Euro left is powerless against austerity zealots

March 16, 2012

Opposition to the euro zone fiscal compact is mounting among centre-left parties. This could derail ratification by some member states. But rules to enforce strict fiscal discipline are already part of European law, and Germany and the ECB are still calling the shots.

Shame if Spain loses second ECB seat

March 19, 2012

Wrangling over big euro jobs may leave Madrid with only one ECB seat and Luxembourg, whose population is 1 pct of Spain’s, with two. That would be a mistake. Having Spain fully on board is an asset. And marginalising it would make it harder to deal with if it became a liability.

China reform may require a deeper crisis

March 20, 2012

The outgoing premier and his likely successor have both called for change. But the biggest required reforms will leave powerful losers. Unlike Greece, Spain or Russia, China lacks creditors or voters to hold leaders to account. Greater turmoil may be needed to force a shift.