Breakingviews

Japan lesson on China debt: extend, don’t pretend

May 26, 2015

Asking Chinese banks to roll over loans to local governments is reminiscent of 1990s Japan, where lenders choked good borrowers to keep zombies alive. The real mistake wasn’t extending losses into the future, but pretending banks could lend to everyone else without more capital.

HP’s China deal extracts harmony from awkwardness

May 22, 2015

Selling 51 pct of its Chinese networking unit for $2.3 bln to a state-owned company looks like a partial retreat from an unfriendly market. But the U.S. tech giant now has a powerful ally with deep ties to Beijing. Rivals from Cisco to Microsoft should consider similar matches.

Edward Hadas: The uses and abuses of GDP

By Edward Hadas
May 20, 2015

The standard measure of output is a useful indicator of short-term trends. It can also help compare levels of development. In poor countries, faster GDP growth is a good policy goal. But in richer countries, GDP-think misses important economic changes and challenges.

Asia’s consumption slump is newest growth hurdle

May 20, 2015

The battle against weak foreign demand is already into its fourth year. Now domestic consumers, too, are going on strike. The fear that Asia may be unable or unwilling to spend its cheap-oil bonanza is coming true. Without bold monetary easing, economic growth might tank.

SoftBank lives up to its name with Indian startup

May 19, 2015

Housing.com CEO Rahul Yadav is a venture capital nightmare. The 26 year-old has slammed investors including the Japanese group as intellectually incapable and pledged to give away his shares. SoftBank may value a reputation for being founder-friendly, but being weak is worse.

China’s lodestar is not reform but avoiding chaos

May 18, 2015

The authorities want banks to show mercy to stressed local government-linked borrowers. The plan seems to be to avoid chaotic deleveraging. Though it’s a step back from reform and market forces, until a clear line has been drawn between good and bad, it’s the right thing to do.

India online retail hierarchy looks far from fixed

May 14, 2015

Investors are pouring money into the country searching for the next Alibaba or Amazon. Though India’s e-commerce opportunity is huge, low barriers to entry mean it is easy for anyone with deep pockets to spoil the party.

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.

SoftBank’s next boss more symbol than succession

May 12, 2015

Chairman Masayoshi Son has no plans to retire but has named ex-Google executive Nikesh Arora as his likely successor. Appointing a foreigner to the role may be mainly a way for SoftBank to gild its international credentials, but the gesture is still a valuable one.

China’s new monetary tool: quantitative teasing

May 11, 2015

Cutting interest rates, as the central bank just did, can ease pressure on some borrowers, but won’t do much more. Making money more abundant, rather than just cheaper, would be a more decisive move. For now the government is wisely keeping its powder dry.