Jul 3, 2013 06:16 UTC

How to cut the cord on China’s shadow banks

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By John Foley

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

It’s time for some delicate surgery on China’s financial system. The growth of non-bank lending channels – collectively known as “shadow banking” – is basically helpful for the economy. But regular banks are in too deep. China’s financial regulators need to separate the siamese twins.

Jun 28, 2013 14:54 UTC

UK’s big build dreams still dogged by past binge

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By Ian Campbell

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

The UK government wants austerity to pave the way for bold modernisation of Britain. In reality its cuts don’t reverse the previous explosion in government spending and there isn’t much money for its big infrastructure dreams.

Jun 28, 2013 09:02 UTC

China’s corporate spying is three-cornered problem

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By John Foley

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

American prosecutors have targeted Chinese wind turbine maker Sinovel for allegedly stealing secrets from a U.S. rival. The threat of a $4.8 billion fine for a company with total assets of $4.6 billion sounds potent. But it doesn’t address the economic conditions that make China a target for accusations of ideas theft. Call it the corporate espionage triangle.

Jun 27, 2013 09:50 UTC

Fed’s sand will make Asia’s investment wheel creak

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By Andy Mukherjee

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

Ben Bernanke has just emptied a big bucket of sand into Asia’s $5.5 trillion-a-year investment wheel. That’s bound to lead to a slowdown in economic activity across the world’s fastest-growing region.

Jun 26, 2013 14:03 UTC

France’s poisonous politics bound to hit economy

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By Pierre Briançon

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

The string of political scandals hitting all French mainstream political parties couldn’t come at a worst time. The economy is in a recession, and fiscal austerity is amplifying the structural weaknesses which developed long before the financial crisis.

Jun 26, 2013 04:23 UTC

China bank rout favours big lenders over small

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By John Foley

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

A pledge of support for cash-strapped lenders should take the fear out of China’s interbank market. After two weeks of spiking rates, the People’s Bank of China (PBOC) said on June 25 it had extended liquidity to some lenders, and would stand ready to help others. Its new stance will most benefit those in least need: China’s big banks.

Jun 25, 2013 07:21 UTC

Asia’s pain unevenly spread as China slows

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By John Foley

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

Asia’s falling markets reflect the belief that a slowdown in China will take its toll on the region. But things aren’t so straightforward. Look at what proportion of the region’s largest economies goes to China, and how important those exports are to domestic GDP. Despite a decade of rapid growth, the world’s second-largest economy has had a smaller impact on its neighbours than might be expected.

COMMENT

Every dollar invested into the PRC only helps the PRC manufacture more bullets, tanks, bombers and missiles to arm its Peoples “Liberation” Army.

Every dollar spent on a cheap product from the PRC (Made in China) is a spit in the face of Tibetans whose freedoms have been taken away by the PRC through its Peoples “Liberation” Army.

The PRC would not be in a position to intimidate and bully nations like Japan, Vietnam, India, the Philippines, etc, if it were not for the massive injection of western dollars into the PRC economy.

Today the PRC is trying very hard to hide or minimise the fact that it is facing a credit bubble so massive that it will drain most of its dollar reserves when the bubble pops.

It is trying to hide or minimise the fact that many Chinese did not benefit from the so-called PRC boom times since only those families with close contacts within the PRC government have benefited.

In return, these cronies have squandered the economic riches by lapping up foreign luxury goods, traveling to the most expensive cities in Europe, sending their children to posh schools abroad and buying property in Australia (reputed to be the world’s most expensive country).

All this while poor provincial Chinese flock to PRC cities where they are treated like annoying 2nd rate denizens and foreigners in their own land. Discontent and petty riots are commonplace. Is this really where investors should place their money?

This is a plea for investors to invest in your own countries first. Invest in your own peoples education and job security first. If you have to invest abroad, then please invest in nations that are friendly to yours.

Please do not let some banker use your money to prop up an un-elected regime that will only threaten your country and other countries, in return.

Thank you very much.

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Jun 24, 2013 10:27 UTC

China’s bonfire of liquidities claims first victim

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By John Foley

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

China’s bonfire of the liquidities has claimed its first victim: equities. Stocks in Shanghai and Shenzhen tumbled more than five percent on June 24 after the central bank published a letter suggesting it’s in no rush to help overstretched lenders continue in their bad habits. This tough new approach could mean a little more chaos will be injected into China’s financial system. For the economy overall, it’s both positive and helpful.

Jun 21, 2013 07:04 UTC

China credit squeeze challenges “age of ambiguity”

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By John Foley

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

Silence has been good policy for China. The authorities’ penchant for relying on the unsaid, especially when it comes to financial obligations, has been a useful tool for channeling funding to banks and companies. But recent ructions in the interbank market, where lenders turn for short-term funding, suggest the age of ambiguity may soon have to end.

Jun 20, 2013 05:03 UTC

Fear of Fed: Where to hide in Asia?

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By Andy Mukherjee

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

The end of the cheap-cash era may not be good news for Asian equities, but it need not lead to an across-the-board stampede. The end of the U.S. Federal Reserve’s bond-buying programme has triggered fears of a liquidity drought. However, not all markets are equally vulnerable.