John's Feed
Feb 13, 2014
via Breakingviews

Alibaba tests the limits of non-bank banking

Photo

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

Photo

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

Photo

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
via Breakingviews

Audit spat pokes hole in China’s financial edifice

Photo

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.

Jan 21, 2014
via Breakingviews

China’s growth slower but no more believable

Photo

By John Foley

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

China’s GDP growth may be getting more sustainable, but it’s no more believable. The country’s 31 provinces are on course to report aggregate nominal GDP far in excess of the total central figure for 2013 – and not for the first time. Big numbers are getting less reliable, which strengthens the case for new ones.

Jan 17, 2014
via Breakingviews

China trust default is least painful option

Photo

By John Foley

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

Much about China’s financial system is fuzzy, particularly when it comes to so-called trust companies. But when push comes to shove the case for letting an investment product fail is pretty clear.

Jan 14, 2014
via Breakingviews

Coal typifies China’s reform: it’s hard and dirty

Photo

By John Foley 

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

Coal is much like China’s reform challenge: hard and dirty. Even as politicians fret about the country’s chronic smog, they approved 100 million tonnes of new mining capacity in 2013, six times the amount for the previous year. That will add to the 300 million tonnes or so already due to come on stream in 2014. The habit is proving difficult to kick.

Jan 9, 2014
via Breakingviews

Difficult second coming pays off for Chinese IPOs

Photo

By John Foley 

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

Free money, anyone? China’s equity markets have just reopened after a fourteen-month hiatus, starting with a batch of eight companies planning initial public offerings in the week ending Jan. 10. With so much pent-up demand, and rules in place to protect investors from losses, exuberance is inevitable. But better to have frothy IPOs than none at all.

Jan 8, 2014
via Breakingviews

China conducts monetary policy in the shadows

Photo

By John Foley 

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

China is engaging in a shadowy version of monetary policy. Recent tinkering by the People’s Bank of China, which has pushed up rates, looks targeted at parts of the “shadow banking” sector. This kind of variegated tightening might just work, simply because China’s financial system is so dysfunctional.

Dec 27, 2013
via Breakingviews

China’s banks are coming – this time for real

Photo

By John Foley 

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

China’s banks are racking up foreign assets, driven by trade flows, and the country’s corporate diaspora. Even at the current slow pace, what today looks like “following the client” could soon become “following everyone’s clients”.