John's Feed
Mar 5, 2013
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Three roadmaps for an urbanizing China

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By John Foley

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

China is at an urban crossroads. Almost 53 per cent of its population lived in cities and towns at the end of 2012. In another two decades, China will probably be nearing the 80 percent urbanization level common in the West – suggesting some 1.1 billion city-dwellers. Premier designate Li Keqiang wants urbanization to put people first. The question is: where in China will he put them?

Mar 4, 2013
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China’s gains tax won’t put a roof on house prices

By John Foley

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

China’s house prices are too high and local tax revenue too low. What better way to address both problems than taxing capital gains on property? China’s cabinet has promised to enforce such a levy on homeowners. While that drove down the share prices of property developers, it is unlikely to do the same for real estate values.

Mar 4, 2013

Breakingviews:China’s gains tax won’t put a roof on house prices

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

By John Foley

BEIJING, March 4 (Reuters Breakingviews) – China’s house
prices are too high and local tax revenue too low. What better
way to address both problems than taxing capital gains on
property? China’s cabinet has promised to enforce such a levy on
homeowners. While that drove down the share prices of property
developers, it is unlikely to do the same for real estate
values.

Feb 27, 2013
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Illumination alone won’t slow China shadow banks

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By John Foley

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

When it comes to China’s shadow banks, switching on the lights isn’t enough to make the risks go away. The country’s lenders may soon be asked to disclose their off-balance sheet lending activities, starting with a trial in Shanghai, according to the Financial Times.

Feb 20, 2013
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China’s next debt crisis will be a local affair

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By John Foley

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

China’s next credit crisis may be a local affair. A recent suggestion of setting up local bailout funds reflects the fact that it’s no longer big banks that present the biggest risks, but towns and regions. The elaborate ties between local borrowers, lenders and governments could make future credit problems both chaotic – and concentrated.

Feb 6, 2013
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Dividend reform won’t fix China SOE money-go-round

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By John Foley

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

China’s elaborate money-go-round starts and ends with its cash-hoarding state-owned enterprises. So a plan to make them pay bigger dividends sounds promising. Still, if the goal is to return cash to the people, there is a long way to go.

Feb 1, 2013
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Profit first casualty in China’s mobile ad war

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By John Foley

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

China’s online giants are tooling for the mobile ad wars, and profit will be the first casualty. Of 560 million web users, three-quarters are already using smartphones, threatening massive disruption for companies who depend on online advertising revenue. Baidu, the dominant search provider that reports earnings on Feb. 4, has most to prove, and most to lose.

Jan 31, 2013
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Japan helps Nomura put a bad year behind it

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By John Foley

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

Who wants to be a global investment bank anyway? Not Nomura. The Japanese financial group delivered a solid quarter-on-quarter boost in underlying pre-tax profit in the final three months of 2012, driven largely by a recovery in its home market. Last year’s insider trading scandal and subsequent resignations punctured the global dreams Nomura was pursuing when it bought parts of bankrupt Lehman Brothers in 2008. For investors, that may be no bad thing.

Jan 25, 2013
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TPG runs rings around Li Ning shareholders

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By John Foley

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

TPG is running rings around shareholders in Li Ning. The buyout firm has renegotiated the terms of a convertible bond it bought from the Chinese sports brand a year ago, and agreed to underwrite a deeply discounted capital raising. The deal leaves other investors in second place.

Jan 23, 2013
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China’s bail-in bonds leave room for conflict

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By John Foley

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

When China’s banks make a mess, the government usually pays the clean-up bill. But Industrial and Commercial Bank of China’s plan to issue $9.6 billion of so-called “bail-in bonds” suggests the costs of the next crisis will be spread more widely. For investors, there’s room for confusion and conflict.