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Mar 11, 2014
via Breakingviews

Credit chains are China’s weakest link

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By John Foley

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

China’s debts are troubling – and not just because they’re alarmingly big. An equally worrying threat to the country’s prosperity is the complexity of those debts. That’s the trouble with China’s lengthening “credit chains”.

Mar 11, 2014
via Breakingviews

Credit chains are China’s weakest link

Photo

By John Foley

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

China’s debts are troubling – and not just because they’re alarmingly big. An equally worrying threat to the country’s prosperity is the complexity of those debts. That’s the trouble with China’s lengthening “credit chains”.

Mar 3, 2014
via Breakingviews

Deadly assault brings new kind of risk to China

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By John Foley

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

The shocking knife attack that left at least 33 dead in Kunming railway station brings a new kind of risk to China. Investors’ belief in the relative stability of the People’s Republic has allowed it to weather political purges and border disputes without upsetting asset prices or capital flows. But rising ethnic tension could lead to a damaging recalculation at a fragile time.

Mar 3, 2014
via Breakingviews

Deadly assault brings new kind of risk to China

Photo

By John Foley

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

The shocking knife attack that left at least 33 dead in Kunming railway station brings a new kind of risk to China. Investors’ belief in the relative stability of the People’s Republic has allowed it to weather political purges and border disputes without upsetting asset prices or capital flows. But rising ethnic tension could lead to a damaging recalculation at a fragile time.

Feb 19, 2014
via Breakingviews

Fear and loathing in China’s trust industry

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By John Foley

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

China’s trust sector is the financial system’s enfant terrible. It’s a 10.9 trillion yuan ($1.8 trillion) industry built on taking short-term funding and channeling it into longer-term investments. That mismatch has already led some trust products to unravel, and more will follow. What causes concern isn’t so much trusts failing as them being foolishly rescued.

Feb 19, 2014
via Breakingviews

Fear and loathing in China’s trust industry

Photo

By John Foley

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

China’s trust sector is the financial system’s enfant terrible. It’s a 10.9 trillion yuan ($1.8 trillion) industry built on taking short-term funding and channeling it into longer-term investments. That mismatch has already led some trust products to unravel, and more will follow. What causes concern isn’t so much trusts failing as them being foolishly rescued.

Feb 13, 2014
via Breakingviews

Alibaba tests the limits of non-bank banking

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By John Foley

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

Alibaba isn’t a bank. But for customers it’s getting hard to tell the difference. Users of China’s dominant e-commerce website can now deposit funds, make investments, take out loans and even give out gifts of virtual cash. In taking on China’s lenders, Alibaba and its online rivals may be taking on bank-like risk.

Jan 30, 2014
via Breakingviews

ICBC takes slow-burn approach to global expansion

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By John Foley

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

ICBC’s purchase of Standard Bank’s UK trading division has moved at a glacial pace, and gives rivals little to fear. That’s the best sign that China’s largest lender knows what it’s doing.

Jan 27, 2014
via Breakingviews

China falls prey to its own capital magnetism

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By John Foley

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

Capital is flooding into China, and central bankers are worried. It’s easy to see why: such problems aren’t supposed to happen in countries with strict capital controls. But China’s monetary magnetism is of the authorities’ own making. In trying to slow reckless lending growth, planners have created a huge arbitrage opportunity.

Jan 23, 2014
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Audit spat pokes hole in China’s financial edifice

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By John Foley

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

China’s legal grey areas have been a source of enormous wealth for investors. Now a U.S. judge is threatening to poke a hole in the entire edifice. The Chinese units of the world’s biggest four auditors face a six-month suspension from auditing U.S.-listed companies after the judge decided they wilfully refused to hand over documents on Chinese clients to U.S. regulators. It’s hard to fault his logic, but upholding the rules could bring a huge cost.