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Aug 2, 2012
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Olympics a bad metaphor for economic rivalry

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By John Foley

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

China breaks the rules. The United States loses its edge. As for Britain, it barely registers at all. It’s easy to see the Olympic Games as a metaphor for economic rivalry. Fortunately, the real world is different, and can be much more harmonious – if everyone basically plays fair.

Jul 26, 2012
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Beijing rains warn investors about political climate

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By John Foley

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

Beijing’s weekend floods inflicted an unusually high human cost for a modern city. Attempts to squash criticism of the response made matters worse. The lesson isn’t just that Beijing needs better drains, but that anxiety is acute ahead of next year’s leadership change. For investors, the equivocal way China handles crises alters the political risk premium.

Jul 26, 2012
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Nomura resignations pave way for the Lehman unwind

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By John Foley

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

The resignations of Nomura’s two top executives may close the chapter on the Japanese firm’s plan to become a global player in investment banking. Departing Chief Executive Kenichi Watanabe and Chief Operating Officer Takumi Shibata led the opportunistic swoop on bankrupt Lehman Brothers in 2008. They are leaving mainly due to an unrelated insider trading scandal. But Lehman isn’t working, and the pair’s replacements have a chance for a dignified unwind.

Jul 24, 2012

CNOOC’s state control is a paper tiger

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

By John Foley

BEIJING, July 24 (Reuters Breakingviews) – Opponents of
CNOOC’s (0883.HK: Quote, Profile, Research) $15 billion bid for Canadian oil producer
Nexen (NXY.TO: Quote, Profile, Research) will focus on the idea that the Chinese energy
major is a Trojan horse for the Communist Party. Similar fears
derailed CNOOC’s bid for U.S. producer Unocal in 2005. Such
arguments are unhelpful. State ownership is real, but state
control is a paper tiger.

Jul 13, 2012
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Beware “blame China” earnings phenomenon

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By John Foley

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

Get ready for some corporate China-bashing this earnings season. Investors are already punishing companies like Burberry and Cummins for what they perceive to be disappointing growth from the Middle Kingdom. A slowdown in the world’s growth engine will see many more CEO fingers pointing east.
 
Trench-coat maker Burberry’s shares fell 7.4 percent on June 11 after it said annual Chinese same-store growth was somewhere near 15 percent in the past quarter, compared with twice that a year earlier. Never mind that this time last year Burberry had just bought out and glammed up its Chinese stores, making 2011 a tough act to follow. Investors saw a hole in the China story and ran through it.

Jul 6, 2012
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China rate cut targets financial not economic ills

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By John Foley

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

China’s surprise interest rate cut looks like a response to financial rather than economic ills. Thursday evening’s reduction in the lending rate by 31 basis points and the deposit rate by 25 points won’t alone do much to change the economic picture even if data due next week show activity is markedly slowing down. What it will do is buy banks and lenders some time, and postpone the more imminent danger of a rise in bad loans.

Jul 5, 2012
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China can’t reproduce its way out of trouble

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By John Foley

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

China has outgrown its one-child policy. Three prominent government scholars called this week for the government to scrap it before China’s population gets too old, too fast. Yet after 30 years, such an intrusive policy can’t be reversed overnight. China will need time to prepare for the 2.3-child world.

Jun 29, 2012
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Juilliard improves tone of China’s urbanisation

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

The tone of China’s frantic urbanisation may be changing for the better. The Juilliard School, one of the best known U.S. music and fine arts colleges, has picked the city of Tianjin for a new institute. The host city is unlikely to be motivated only by a love of the performing arts, but it matters little so long as China’s urban jungle gets more liveable.

Jun 26, 2012
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Evergrande red flags are real, even if fraud isn’t

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By John Foley

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

Short sellers launched a rocket at Evergrande, China’s second-largest property developer, last week. It hasn’t quite hit the mark. Citron Research, the maverick investment house that launched the allegations of bribery and dodgy accounting, may have shot itself in the foot by fudging some numbers, and leaping to unlikely conclusions. Yet the Hong Kong-listed Evergrande’s red flags are real, even if the supposed fraud isn’t.

Jun 12, 2012

Credit Suisse toxic bonus keeps giving

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

By John Foley

HONG KONG, June 12 (Reuters Breakingviews) – Credit Suisse’s
(CSGN.VX: Quote, Profile, Research) toxic bonus plan is the gift that keeps on giving.
Three years ago, around 2,000 employees were forced to take some
$5 billion of the riskiest assets from the Swiss group’s balance
sheet as their bonuses. Now, recipients are being offered the
chance to buy more. What once seemed like a punishment has
turned into something of a perk.