U.S. trade setback more diplomatic than economic

May 13, 2015

Senators denied President Obama authority to negotiate a new Pacific trade pact. The squabbling contrasts with China’s success in organising its infrastructure bank. But the benefits of both projects are uncertain. The world economy can shrug off the blow to America’s leadership.

Yum Brands China split short on crispy goodness

May 6, 2015

Activists have turned the hotlamp on the KFC parent’s China arm. It could be worth $20 bln if diners forget past safety scandals, a Breakingviews calculator shows. To justify more, Yum must expand rapidly, but pitching into China’s poorest cities brings risk as well as revenue.

Abe’s Capitol Hill speech needs ideas for backyard

April 29, 2015

Shinzo Abe’s address to Congress will highlight Japan’s strategic and financial relationship with the United States. But the mooted trade deal offers limited economic benefits. Managing the rivalry with China and fostering cordiality with India can make Japan a more vital ally.

China’s cyber crackdown: A guide for the perplexed

April 24, 2015

The People’s Republic is squeezing technology companies. New banking rules and counter-terrorism legislation could make it harder for foreign groups to operate in the expanding market. Is security just an excuse to protect domestic players? Breakingviews cracks the code.

Tencent’s discount to Facebook harder to justify

April 7, 2015

The Chinese social media giant generated about the same revenue as its U.S. counterpart last year and was more profitable, despite having fewer users. Yet it trades at a lower multiple of earnings. As the two business models converge, the valuation gap needs a rethink.

China pulls its punches with Qualcomm settlement

February 10, 2015

Antitrust watchdogs slapped a $975 mln fine on the U.S. chipmaker and forced it to lower patent fees. That’s helpful for local smartphone makers. Yet the outcome doesn’t explicitly curb Qualcomm’s dominance. Big as China is, it can’t yet afford to shut out foreign technology.

SEC gets tough on auditors and soft on China

February 9, 2015

Accounting firms will find it harder to keep paperwork on suspected Chinese fraudsters from the U.S. watchdog. Those that don’t try to help could face temporary bans. Yet the new approach leaves China plenty of scope to nix investigations. Investors are only a little better off.

World’s swelling debt calls for radical surgery

February 5, 2015

Despite promises to deleverage, global borrowing has increased by $57 trillion since 2007, according to McKinsey. It’s hard to see economies growing their way back to prudence. Shrinking the pile will require borrowers to seek relief – and some creditors to cancel their claims.

Obama’s nuclear gift to Modi is shrewd investment

January 26, 2015

The U.S. president has unblocked a stalled nuclear power deal with India, allowing Prime Minister Narendra Modi to build new reactors. While that will boost orders for GE-Hitachi and Westinghouse, bigger gains to the U.S. economy will come from ending India’s energy deficit.

Review: Why banking is flawed and how to fix it

January 16, 2015

An investment banker and macroeconomist convincingly argue that regulators have little hope of curbing private credit creation in the digital age, because the borders of banking have been hopelessly smudged. Their solution is radical and ingenious. Sadly, it also looks utopian.