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Feb 17, 2015
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China property dispute unearths debt skeletons

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By John Foley

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

When investing in property, check the basement. Kaisa shows what happens when that advice is ignored. Days after rattling lenders with a late interest payment, the Chinese developer has announced its debts are double the level it reported at the end of June. That raises the stakes for the company’s restructuring, and others that may follow.

Feb 17, 2015
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China property dispute unearths debt skeletons

Photo

By John Foley

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

When investing in property, check the basement. Kaisa shows what happens when that advice is ignored. Days after rattling lenders with a late interest payment, the Chinese developer has announced its debts are double the level it reported at the end of June. That raises the stakes for the company’s restructuring, and others that may follow.

Feb 12, 2015
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Activists take on passivists in HK share spat

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By John Foley 

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

Activists are taking on Hong Kong’s investor passivism. Hedge fund Elliott Management has mounted a legal challenge to Bank of East Asia, raising questions about the ease with which companies can issue slabs of stock to friendly shareholders. Investors can theoretically stop such deals from happening, but often don’t. That leaves little option but trying to embarrass companies into doing the right thing.

Feb 11, 2015
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Fake-free China might not be better off

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By John Foley

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

Pseudo-Prada bags, sham Apple stores, even artificial eggs – China’s ability to generate fake versions of familiar items is legendary. Around three-quarters of knock-off goods seized by U.S. and European customs come from the People’s Republic. The government has been talking a good game, including what looks like a new focus on fake goods sold via the country’s biggest e-commerce company, Alibaba. The trouble is that incentives aren’t straightforward. While copying hurts innovation and trust, a counterfeit-free China wouldn’t be good for everyone.

Feb 9, 2015
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SEC gets tough on auditors and soft on China

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By John Foley 

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

Accounting firms can no longer hide behind China’s skirts when U.S. regulators demand paperwork on suspected fraudsters. Yet China can still protect beancounters and their clients if it chooses. This unsatisfactory compromise leaves investors only a little better off.

Jan 29, 2015
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Alibaba gives crash course on government relations

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By John Foley 

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

Alibaba is teaching its shareholders a useful lesson about Chinese business: there’s no such thing as having a good relationship with the government. The company’s shares fell 4.4 percent on Jan. 28 after a regulator lambasted its sales habits. Alibaba says the State Administration for Industry and Commerce (SAIC) is being irrational. That is little comfort to investors who are now $11 billion worse off on paper.

Jan 28, 2015
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China political investment bubble has new antihero

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By John Foley 

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

It’s hard to think of a better embodiment of China’s soaring stock market than Shenwan Hongyuan. Shares in the brokerage – newly formed from the merger of China’s tenth and sixteenth biggest trading houses – reached a valuation of $47 billion on its first day of trading. That made it bigger than U.S. brokerage Charles Schwab, and a fitting emblem of political investment mania.

Jan 22, 2015
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China’s “new normal” masks old anxieties

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By John Foley 

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

It’s hard to be scared of normal. That might be why China’s latest meme has caught on so fast. Economists, business leaders and most lately Premier Li Keqiang have used the phrase “new normal” to explain China’s slowdown. The insistence on normality mainly disguises the fact that the current situation is anything but.

Jan 20, 2015
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China slowdown sets scene for urban struggle

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By John Foley 

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

For politicians and peasants, China’s 7.4 percent GDP growth in 2014 is a happy outcome. Not so for the all-important demographic of middle-class city dwellers. The scene is set for a year of urban struggle.

Jan 14, 2015
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Milk slump sends warning on China consumer froth

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By John Foley 

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

A year ago, China’s thirst for milk was the great white hope for dairy companies. Now the froth has started to subside. A profit warning from Hong Kong-listed infant formula maker Yashili shows the dangers of investing based on broad consumer trends.