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Sep 4, 2013
via Breakingviews

China’s bad debt could leave $500 bln equity hole

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By John Foley

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

China’s bad debts could blow a $500 billion hole in bank balance sheets. That’s roughly how much extra equity the eleven biggest lenders might need if 10 percent of their loans went sour, according to a Breakingviews calculator. Though the chairman of ICBC, China’s biggest lender, thinks dismal bank valuations are “unfair”, the malaise is well deserved.

Sep 4, 2013

Breakingviews-China’s bad debt could leave $500 bln equity hole

(Refiles to update context news)

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

By John Foley

BEIJING, Sept 4 (Reuters Breakingviews) – China’s bad debts
could blow a $500 billion hole in bank balance sheets. That’s
roughly how much extra equity the eleven biggest lenders might
need if 10 percent of their loans went sour, according to a
Breakingviews calculator. Though the chairman of ICBC
(601398.SS: Quote, Profile, Research), China’s biggest lender, thinks dismal bank
valuations are “unfair”, the malaise is well deserved.

Aug 30, 2013
via Breakingviews

Xiaomi can’t afford to let its hype go to waste

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By John Foley

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

Xiaomi has poached one of Google’s top executives – but can it steal Silicon Valley’s tech crown? The Chinese smartphone maker already outsold Apple’s iPhone in the Chinese market in the second quarter of 2013. Its valuation has ballooned from $4 billion to $10 billion in a year, based on a recent capital increase. Hiring former Googler Hugo Barra will fuel the hype; Xiaomi shouldn’t waste it.

Aug 30, 2013

Breakingviews: Xiaomi can’t afford to let its hype go to waste

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

By John Foley

BEIJING, Aug 30 (Reuters Breakingviews) – Xiaomi has poached
one of Google’s (GOOG.O: Quote, Profile, Research) top executives – but can it steal
Silicon Valley’s tech crown? The Chinese smartphone maker
already outsold Apple’s (AAPL.O: Quote, Profile, Research) iPhone in the Chinese market in
the second quarter of 2013. Its valuation has ballooned from $4
billion to $10 billion in a year, based on a recent capital
increase. Hiring former Googler Hugo Barra will fuel the hype;
Xiaomi shouldn’t waste it.

Aug 28, 2013
via Breakingviews

China’s consumers aren’t living up to sales pitch

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By John Foley

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

Consumer brands in China are finding their rewards aren’t quite as advertised. Growth in purchases of a wide range of goods has slowed sharply over the past year, and companies ranging from Samsonite to Apple are reporting disappointing Chinese sales figures. Consumers in the world’s second-largest economy will have their day, but the idea they alone can sustain growth looks threadbare.

Aug 27, 2013
via Breakingviews

China’s debt molehills could turn into mountains

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By John Foley

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

The mountains are high, and the shareholders are far away. China’s banks are reporting results that suggest their bad debts are under control and earnings healthy. But where investors don’t easily see them, risks are growing. It’s at the local level that the problems with China’s debt build-up could escalate most rapidly.

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
via Breakingviews

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
via Breakingviews

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.