John's Feed
Apr 30, 2012
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China and U.S. should avoid human rights fight

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By John Foley

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

An escaped Chinese dissident takes refuge in the U.S. embassy. It’s a diplomatic crisis, but needn’t become an economic one. Washington values rights, but it also needs a stable and cooperative China. As for Beijing, it has a chance to improve its image.

Apr 25, 2012
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Jailing IPO bankers is a step too far

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By John Foley

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

Hong Kong shouldn’t rush to lock up miscreant sponsors of initial public offerings. The city’s securities regulator rightly wants to toughen up the regime for new listings. But talk of making bankers individually and criminally liable for what goes in the prospectus is overkill, and such policy would make Hong Kong less efficient.

Apr 17, 2012
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Temasek tinkering could put StanChart in play

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By John Foley

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

Could Temasek’s tinkering put Standard Chartered in play? The Singaporean fund’s recent reshuffle of its bank assets has revived talk about its 18 percent stake in the UK-based emerging markets lender. Now might be a good time to find a new owner.

Apr 13, 2012
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Growth is the least of China’s three big worries

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By John Foley

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

China’s present condition can’t be summed up in a few tenths of a percentage point. True, judged by the headlines, GDP growth of 8.1 percent in the first quarter of 2012 was a miss. Economists polled by Reuters expected 8.3 percent. Investors shouldn’t overthink it: growth is the least of China’s three big worries.

Mar 22, 2012
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Jaguar far from becoming China’s next top model

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

Jaguar Land Rover wants to be China’s luxury brand of choice, but it is taking a circuitous route. The high-class car maker, owned by India’s Tata Motor, has announced a joint venture with China’s Chery Auto, a state-owned producer known for being cheap and cheerful. As a strategy for snagging a bigger share of China’s giant auto market, this is risky.

Mar 22, 2012

BREAKINGVIEWS: JLR far from becoming China’s next top model

By John Foley

HONG KONG (Reuters Breakingviews) – Jaguar Land Rover wants to be China’s luxury brand of choice, but it is taking a circuitous route. The high-class car maker, owned by Tata Motors, has announced a joint venture with China’s Chery Auto, a state-owned producer known for being cheap and cheerful. As a strategy for snagging a bigger share of China’s giant auto market, this is risky.

It’s easy to see why luxury brands want more of China, now the world’s biggest car market. Jaguar Land Rover’s sales there grew 58 percent by volume in the fourth quarter of 2011, year on year. While sales of passenger vehicles overall have slowed, and even luxury models are being discounted by dealers, the underlying trend for trading up is still strong. Audi, BMW and Mercedes Benz are the top brands, thanks to their own joint ventures, and BMW reckons China could become its biggest market this decade.

Mar 20, 2012
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China reform may require a deeper crisis

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By John Foley

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

“Reform” might turn out to be this year’s most overused word in China. The country’s outgoing premier Wen Jiabao, and his likely successor Li Keqiang, have both recently spoken of the urgent need to change. Even Communist Party mouthpiece People’s Daily advised last month that it’s better to have imperfect reforms than a crisis caused by none at all. The trouble is that China lacks external creditors or voters to hold leaders to account and make these reforms a reality.

Mar 15, 2012
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Purges and paranoia weaken China’s crisis defences

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By John Foley

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

Purges and paranoia are making an unwelcome comeback in China. Bo Xilai, the showman-like party chief of Chongqing municipality, was ousted on March 15 after a scandal surrounding a close aide drew a surprisingly sharp attack by outgoing premier Wen Jiabao. This spectacle makes little difference to China’s short-term ability to grow rapidly. But a divided China may be less well equipped to grow in the long term, or handle economic shocks.

Mar 1, 2012
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China’s march to currency dominance just got longer

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By John Foley

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

China’s path to currency dominance just got a bit longer. Hong Kong holdings of the Chinese yuan fell in January, according to data out on March 1; there has been an 8 percent decline since the end of November. With the yuan no longer certain to rise in value, foreigners have much less reason to hold it. For a would-be reserve currency, that’s a real spanner in the works.

Feb 29, 2012

StanChart doesn’t justify premium over HSBC

By John Foley

HONG KONG, Feb 29 (Reuters Breakingviews) – Both emerging
market lenders had a strong 2011, in different ways. StanChart
is growing while HSBC restructures. But StanChart is relatively
bigger in troubled India and Korea, while hiring has become
expensive. Takeover hopes aside, the valuation gap is hard to
justify.

Full view will be published shortly.

CONTEXT NEWS

– Standard Chartered, the UK-domiciled emerging market
lender, reported $6.8 billion of pre-tax profit in 2011, an 11
percent increase on the previous year. But between the first and
second halves of the year, pre-tax profit fell 14 percent,
driven by higher expenses and an increase in loan impairments.