HONG KONG (Reuters Breakingviews) - The fallout from American tariffs is hinting at a prolonged trade war. As U.S. companies brace for taxes on another $200 billion of Chinese exports, many say they’re now considering leaving the People’s Republic. That has Beijing wondering if such an exodus is as much a policy aim as the stated motive of intellectual property theft.
HONG KONG (Reuters Breakingviews) - Beijing’s confused tax messages will strain growth. A major fiscal overhaul should leave China’s workers with extra cash to spend. Companies, however, could find themselves chased to pay into the social safety net. The government says the move won’t increase costs, but the confusion has left officials scrambling.
HONG KONG (Reuters Breakingviews) - The U.S.-China trade war is stumbling on the biggest block. Mid-level talks yielded no clear breakthroughs even as President Donald Trump’s administration prepares duties on an additional $200 billion of Chinese goods. The United States wants reforms to industrial policy that would fundamentally alter Beijing’s development model. The Chinese government would struggle to deliver, and is unlikely to try.
HONG KONG (Reuters Breakingviews) - Australia’s ban on Huawei undercuts the “Made in China” agenda. Security and political concerns prompted authorities to block the Shenzhen-based telecom giant from providing supplies to the country’s planned 5G network. It’s a setback for Huawei, but also for Beijing. The world-beating national champions it wants to cultivate are increasingly seen as dangerous arms of the state.
HONG KONG (Reuters Breakingviews) - An unusually harsh rebuke for one of its top bond rating agencies highlights China’s growth dilemma. Beijing is cracking down on Dagong Global Credit Rating over cosy corporate ties: the sort of links that have contributed to distorted risk pricing in the People’s Republic for years. Yet regulators are simultaneously leaning on banks to step up support for infrastructure, to help revive flagging growth. China wants both more lending and less risky practices: that’s hard to reconcile.
HONG KONG (Reuters Breakingviews) - China’s stealth support for housing is looking wobbly. Officials are tweaking a $470 billion program through which the People’s Bank of China effectively provides lenders with cheap loans to upgrade housing in smaller cities. Even a small change to the scheme could cause real estate and stock markets to shudder.
HONG KONG (Reuters Breakingviews) - China Tower’s flotation shows the price of telecoms dominance. Shares of the infrastructure company opened flat in Hong Kong on Wednesday. The newly listed entity commands a low valuation relative to its Western peers. It’s a keen reminder of the cost of leading the global industry.
HONG KONG (Reuters Breakingviews) - A falling yuan won’t be enough to save China from tariffs. The United States is ramping up duties once more on imports from the People’s Republic. The yuan’s depreciation against the dollar will cushion the blow, but complex Asian supply chains will ensure it still stings.
HONG KONG (Reuters Breakingviews) - China is showing foreign investors a carrot and a big stick. The commerce ministry on Monday released proposals to ease restrictions on some overseas investment in mainland stocks. That’s a welcome reprieve from trade tensions. But calls to vet buyers for security risks will give officials new clout just as investors have fresh reasons to be concerned.
HONG KONG (Reuters Breakingviews) - A fiscal nudge in China betrays some underlying growth jitters. The government is adding corporate tax cuts and other steps to support an economy that seems to be humming along. Bureaucratic tussles that preceded the policy changes suggest speed is as much a priority as rebalancing growth.