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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.

Jan 21, 2013
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Caterpillar’s Chinese lesson: dig below top line

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By John Foley

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

As a company that makes excavators, Caterpillar should know the importance of digging. The U.S. machine maker has taken a $580 million write-down on a Chinese mining equipment producer it bought less than a year ago, erasing three quarters of that deal’s value. The accounting fraud that Caterpillar claims to have found at ERA Mining may not have been visible at the time of the purchase. But the low quality of its target’s rapid growth was.

Jan 18, 2013
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China’s role in Rio Tinto chief’s downfall

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By John Foley

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

Rio Tinto’s $38 billion purchase of aluminium producer Alcan has cost the company billions of dollars in write-downs, leading chief executive Tom Albanese to fall on his sword. But it’s not all Albanese’s fault. Rio’s biggest customer, China, shares some of the blame.

Jan 14, 2013
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Shifting trade winds catch Li & Fung off-guard

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By John Foley

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

Once upon a time, manufacturing was relatively simple: China produced and America bought. That’s changing, and supply chain companies like Hong Kong-listed Li & Fung are doing their best to adapt. A Jan. 11 profit warning that wiped the equivalent of $2.2 billion from the company’s valuation shows there’s plenty of room for error.

Jan 8, 2013
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CDB highlights China’s dysfunctional finance

By John Foley

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

China Development Bank is on a roll. The policy lender raised 1.2 trillion yuan ($193 billion) in net domestic funds in 2012, according to Reuters data. The proceeds funded high-profile foreign takeovers, allowed U.S.-listed Chinese companies to go private, and helped Indian billionaire Anil Ambani refinance bonds. Such activities have less to do with development than with China’s financial dysfunction.

Dec 28, 2012
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China’s hukou belongs on history’s scrapheap

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By John Foley

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

China’s future lies in building bigger, better cities – then giving everyone a fair chance to live in them. For over 50 years the “hukou” system of household registration has prevented free movement, and controlled where and how people live. This inhumane system is changing, but too slowly. It belongs on history’s scrapheap.

Dec 27, 2012
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Weibo should tap the financial network in 2013

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By John Foley

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

Weibo is changing Chinese society, but can it change investors’ minds? The rambunctious social media site, where over 400 million of the country’s web users post, follow, share and criticise, could be worth multiples of what the market currently suggests. A partial spin off in 2013 could be a good way to unlock Weibo’s charms.

Dec 27, 2012

BREAKINGVIEWS: Weibo should tap the financial network in 2013

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

By John Foley

BEIJING, Dec 27 (Reuters Breakingviews) – Weibo is changing
Chinese society, but can it change investors’ minds? The
rambunctious social media site, where over 400 million of the
country’s web users post, follow, share and criticise, could be
worth multiples of what the market currently suggests. A partial
spin off in 2013 could be a good way to unlock Weibo’s charms.

Dec 10, 2012
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China Inc helps AIG streamline, at a price

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By John Foley

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

Bob Benmosche is making AIG more aerodynamic – at a price. The U.S. insurer has agreed to sell its aircraft leasing business to a Chinese-led group for a valuation of $5.3 billion. AIG’s own shareholders will probably forgive their chief executive for the mean headline number and the lack of a clean exit, and focus on the fact that AIG is a step closer to independence from its government shareholder.

Dec 6, 2012
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China shadow bank shakeout would be welcome

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By John Foley

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

A wealth product goes wrong; a bank blames a rogue employee. It sounds trivial. But in China, the crisis at lender Hua Xia could be the beginning of a shadow-bank shakeout. The country’s $2 trillion off-balance sheet financing channel may not stay off the balance sheet for much longer.