Breakingviews

Slowing growth exposes Chinese banks’ debt debris

August 31, 2015

Dodgy credits on the balance sheets of China’s four biggest lenders rose 28 pct in the first half of the year – much faster than the banks replenished provisions. Though overall bad debt levels remain low, continued deterioration threatens to reverse years of profit growth.

Hugo Dixon: How to fix Greece’s banks

By Hugo Dixon
August 10, 2015

The banks are the weakest point in the country’s economic system. They need to be repaired in order to lift capital controls, restore depositor confidence and finance a future recovery. There are some good ways of doing this, even if the best options aren’t making much headway.

Trump and China give opposing lessons in failure

August 7, 2015

Presidential hopeful Donald Trump says bankruptcy in America is no reason to be embarrassed. In debt-laden China it’s different: the state throws money at avoiding failure. Both positions end in the same place. If going bust brings too much pain or too little, disaster follows.

Asia’s sly austerity makes debt challenge worse

August 5, 2015

The region’s companies and households are nursing a debt hangover. Blame China’s credit binge and cheap Western money. But tight fiscal policies are pushing the region in the wrong direction by worsening an economic slowdown. It’s time for governments to loosen the purse strings.

Varoufakis gives Greece the gift of a scapegoat

July 29, 2015

The former finance chief’s alarming tales of trying to hack state computer systems might be just what the debt-stricken country needs. Ask China, which has long recognised the value of a strategic purge. Rogue elements breed discord, but once expelled, they can create more unity.

Hugo Dixon: The optimist’s guide to Greece

By Hugo Dixon
July 27, 2015

There are so many ways things could go wrong in Greece that it’s easy to miss how things could also go right. The good scenario involves the ECB buying up Greek bonds, the lifting of capital controls and a deal on debt relief – all by year-end.

Hugo Dixon: Greek deal leaves bitter aftertaste

By Hugo Dixon
July 13, 2015

Berlin was right to point out that Athens had lost Europe’s trust. But by pushing the Greeks so hard, Germany is also losing Europe’s trust. The summit’s eventual outcome is reasonably fair if tough. But both leaders, Merkel and Tsipras, need to work hard to rebuild trust.

Hugo Dixon: Syriza split best outcome for Greece

By Hugo Dixon
July 11, 2015

PM Alexis Tsipras secured overwhelming parliamentary backing for his U-turn on austerity and reform, but his party has splintered. A new government, which is more serious about implementing whatever bailout programme is negotiated with creditors, will now probably be formed.

Hugo Dixon: Greece will struggle to stay in euro

By Hugo Dixon
July 5, 2015

After the people gave an emphatic “No” to the creditors’ proposals, there are still several ways Athens could avoid the drachma. But none seems terribly likely. All routes will lead to further hardship.

Hugo Dixon: Greeks choose between bad and terrible

By Hugo Dixon
July 2, 2015

Voting “Yes” in Sunday’s referendum would mean Greece suffers at least two years of recession. Voting “No” would bring financial havoc in the short run followed by the return of the drachma, hyperinflation and deep-seated economic depression. The right answer is “Yes”.