Shanghai needs bigger ideas to be a global hub
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own
Shanghai’s stock, bond and spot gold markets are already among the world’s biggest. Yet its new plan to become an international yuan trading centre by 2015 looks too ambitious. Without key changes such as removing capital controls, allowing exchange rate flexibility, and opening up the financial market, Shanghai can be giant but not really global.
Inflation risks lurk in China’s stronger growth
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own
Beijing’s policy easing has worked. China’s GDP increased at a 9 percent annual rate in the fourth quarter of 2011, a faster pace than the 8.3 and 8.5 percent pace in the previous two quarters. The GDP increase goes along with bank lending, which has been exceeding expectations since October, and with December’s encouraging data on industrial production and retail sales. The risks of a hard landing in the first quarter of 2012 are now lower, but excessive policy easing could spur unwanted inflation.
China’s car surplus should worry global giants
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own)
By Wei Gu
HONG KONG, Jan 13 (Reuters Breakingviews) – Demand in the
world’s largest auto market has shifted to a lower gear. China’s
vehicle sales grew just 5 percent by volume in 2011, the slowest
pace in a decade. Gridlocks and pollution limit growth.
Meanwhile, foreign automakers face two problems: not only are
they less welcome in China, but they may soon have to deal with
domestic rivals trying to export their surplus.
China’s likely finmin choice a win for reformists
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
China’s likely next finance minister could be a win for reformists. Lou Jiwei, the head of sovereign wealth fund CIC, is tipped for the job come the next round of leadership changes. He held one of the most global jobs in China’s establishment, and has been a champion for fiscal and other changes. Were he promoted, it would strengthen the pro-reform streak in China’s consensus-driven political machine.
“Tax less, spend less” policy could help China
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Beijing takes too big a share of the economic pie for the country’s own good. Fiscal revenue grew by a quarter in 2011, almost three times as fast as GDP. Giving some back to its people should help spur consumption. The government may have to cut spending on things like infrastructure, but that’s not so bad.
China’s growth may dip below 8 percent in 2012
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
China’s growth may dip below 8 percent in 2012. Yet most China watchers are still predicting close to 9 percent growth. There are three things that could push the country’s GDP growth to a ten-year low: falling house prices, a slump in property investment, and slowing exports. Last time Beijing stimulated the economy; it can ill afford a second round.
Beijing will face fresh yuan dilemma
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Beijing is damned if it does, and damned if it doesn’t. Further appreciation of the yuan increases the chances of an economic hard landing, as the Chinese currency isn’t undervalued anymore. But U.S. politicians have another idea.
Sino-Forest investor tests limits of activism
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Billionaire investor Richard Chandler made a fortune from buying into distressed companies cheaply. He may find Sino-Forest, the Canadian-listed Chinese timber firm hit by accounting-related allegations, a tougher target. Chandler wants the board to go, after it defaulted on some interest payments. Making his bet pay off will require both brain and brawn.
Jack Ma could pay high price to be rid of Yahoo
By Wei Gu
HONG KONG, Dec 23 (Reuters Breakingviews) – The Alibaba
founder wants to buy back most of Yahoo’s stake in his
e-commerce giant. An earlier spat over their payment unit Alipay
showed Ma has nuisance value and may deter other bidders. But
financing it won’t be easy. After selling at the bottom, he
risks paying a peak price.
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CONTEXT NEWS
— The board of Yahoo (YHOO.O: Quote, Profile, Research) is considering a sale of the
bulk of its holdings in the Alibaba Group of China, and Yahoo’s
Japanese affiliate, back to their majority owners in a complex
transaction that values the stakes at about $17 billion,
according to the New York Times Dealbook, which first reported
on the plan on Dec. 21.
Wukan protests rooted in finance not freedoms
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own
The siege of Wukan isn’t about freedoms but finance. Residents of the large village in southern China’s Guangdong province have driven out the authorities, and held daily protests with thousands of participants, after a dispute about land sales by the local government. In modern China this isn’t such a surprise: as prices of land rise and supply gets scarcer, citizens like Wukan’s want more of the profits. China’s model of rapid development is due for an overhaul.
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