John's Feed
Aug 21, 2013
via Breakingviews

Bo Xilai trial says little about China rule of law

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By John Foley

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

The trial of Bo Xilai is a test of China’s political tolerance, not its rule of law. For foreign capitalists, the latter matters more. It’s almost unthinkable the ousted Chongqing party chief will receive anything other than a guilty verdict. Yet it’s still possible to hope that disputes over investment and contracts will be resolved in a more transparent way.

Aug 20, 2013
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China price probes may be too much of a good thing

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By John Foley

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

China’s trustbusters have found their mojo. Last month, the National Development and Reform Commission fined six milk companies including Danone and Fonterra for fixing prices. Petroleum groups, telecom operators, banks and auto makers may be next to feel the heat. China needs stronger watchdogs, as long as what motivates them is a hunger for good, not a taste for glory.

Aug 19, 2013
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Strategic nepotism may give Wall St a Chinese burn

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By John Foley

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

Investment bankers are only as good as their contacts. In China, that may present Wall Street with a problem. The Securities and Exchange Commission is investigating whether JPMorgan hired relatives of powerful people to win business, according to the New York Times. If it decides the answer is “yes”, foreign banks will find it even harder to get a foot in the door.

Aug 15, 2013

Breakingviews-Weibo beats WeChat in China’s internet bake-off

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

By John Foley

BEIJING, Aug 15 (Reuters Breakingviews) – Weibo or WeChat?
Of the two Chinese internet superstars, mobile chat app WeChat
has investors more fired up. Owner Tencent’s (0700.HK: Quote, Profile, Research) shares
have more than doubled since the beginning of 2012, while shares
in Sina (SINA.O: Quote, Profile, Research), which runs microblog Weibo, are up 58 percent.
Yet Sina may be the better bet.

Aug 14, 2013
via Breakingviews

Zhu Rongji merits China’s admiration not imitation

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By John Foley

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

China is channelling its old leaders. A new book of speeches by Zhu Rongji has focused attention on the ex-premier who slashed state-owned enterprises, tamed banks and curbed runaway inflation in the 1990s. The current incumbent, Li Keqiang, faces some similar challenges. He would do well to imitate Zhu’s style, though not his methods.

Aug 12, 2013
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Li Ning hits gruelling part of TPG fitness plan

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By John Foley

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

Most fitness plans come down to two things: burning fat and building muscle. Li Ning has managed the first, but not yet the second. In the first half of 2013 the Chinese sportswear brand closed stores and shed inventory, narrowing its operating losses to 39 million yuan ($6.3 million). But Li Ning has yet to prove it can follow this up with sustainable top-line growth.

Jul 29, 2013
via Breakingviews

Alibaba may be worth $100 bln – but not to Yahoo

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By John Foley

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

Alibaba is Yahoo’s best investment, and its most frustrating problem. The U.S. Internet group’s 24 percent stake in China’s biggest online retailer is probably worth more than Yahoo’s entire booked assets of $16 billion. But a future initial public offering, in which Yahoo has promised to sell half its shares, may deliver much less. That’s because Alibaba holds most of the cards.

Jul 25, 2013

Breakingviews: Baidu digs deeper trench in China’s mobile wars

(Refiles to add RICS)

(The authors are Reuters Breakingviews columnists. The
opinions expressed are their own)

By Robyn Mak and John Foley

HONG KONG, BEIJING, July 25 (Reuters Breakingviews) – Baidu
(BIDU.O: Quote, Profile, Research) is digging itself a deep trench in China’s mobile wars.
The country’s biggest search engine by user traffic reported a
39 percent increase in revenue for the second quarter of 2013
compared to the same period in 2012. Mobile revenue hit over ten
percent of total for the first time. Google (GOOG.O: Quote, Profile, Research) and
Facebook (FB.O: Quote, Profile, Research) have shown how heavy investments can pay off
over time. Yet the cost is high and margins get squeezed. In
China, competitive lines are more blurred. Returns may be even
longer in coming.

Jul 22, 2013
via Breakingviews

China’s PBOC serves reformists an amuse-bouche

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By John Foley

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

China’s central bank has just whetted the appetites of reformists. The People’s Bank of China said on Friday that starting immediately it will let banks lend as cheaply as they like, removing the floor of around 6 percent for one-year loans. It smells like interest-rate liberalisation, but it’s only an amuse-bouche.

Jul 16, 2013
via Breakingviews

GSK finds toxic side effects in Chinese market

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By John Foley and Edward Hadas

(The authors are Reuters Breakingviews columnists. The opinions expressed are their own)

GlaxoSmithKline has a problem in China. The Chinese authorities have a problem that goes well beyond the UK pharmaceutical maker.