HONG KONG (Reuters Breakingviews) - Temporary policies have a habit of becoming permanent, as the People’s Bank of China well knows. It might seek to half-follow a U.S. rate cut expected later this month, yet it’s not clear exactly how. Officials have been looking to scrap the benchmark rate that offers the most straightforward way to do so.
HONG KONG (Reuters Breakingviews) - The boring Hong Kong dollar has been more exciting of late. A couple months after a U.S. hedge fund manager targeted the currency, it is moving sharply. Two giant upcoming stock sales are a major factor, but the recurring phenomenon flags a peculiarity of the system.
HONG KONG (Reuters Breakingviews) - Beijing’s bureaucrats are exposing their investment-banking deficiencies. In an odd public display of buyer’s remorse, China’s envoy to Switzerland has slammed ChemChina’s $43 billion takeover of Syngenta. It hints at the complex politics of such deals. The reaction also calls into question orchestrated mega-deals involving state-owned titans.
HONG KONG (Reuters Breakingviews) - Donald Trump threw another ceasefire into the trade-war reality show he is producing. Investors would be wise to curb their enthusiasm, though. This détente feels a lot like the last one.
HONG KONG (Reuters Breakingviews) - Washington could set the pace for Chinese real estate. Home prices are notching up annual increases of nearly 11%, in spite of official restrictions and a cooling economy. It’s a reminder that property remains a powerful potential lever for Beijing to crank up growth. Fallout from a prolonged trade war will determine how forcefully it gets used.
HONG KONG (Reuters Breakingviews) - African swine fever is nudging China towards peak pork. The outbreak, one of the worst recorded, has sent prices of the meat soaring. That is likely to get worse, even if overall inflation is kept in check, due in part to a cooling economy. It means the disease could encourage a lasting shift among the world’s top buyers.
HONG KONG (Reuters Breakingviews) - Carrefour is beating a dignified retreat from China. The French retailer is selling an 80% stake in its local operations to Suning.com after more than two decades in the market. Valued at 1.4 billion euros including debt, the price looks decent given Carrefour’s slowing sales. For Suning and partner Alibaba, it opens a new front against e-commerce rivals.
HONG KONG (Reuters Breakingviews) - Beijing’s latest infrastructure bump could come with a high price tag. Officials said they will tweak financing rules to allow local authorities to step up spending. It might add up to 4 percentage points to infrastructure investment growth this year. Stimulus is being steadily dialed up, at the cost of more debt risk.
HONG KONG (Reuters Breakingviews) - Beijing’s threats may soon come in bigger packages. Officials are drafting a blacklist for badly behaved foreign companies. It’s the latest warning signal, as China tries to respond to U.S. blows without escalating an increasingly bitter trade dispute. That’s getting harder, and a new FedEx probe raises the stakes.
HONG KONG (Reuters Breakingviews) - China’s liquor giant is raising an empty glass. Shareholders descended en masse to Kweichow Moutai’s annual general meeting. The $166 billion distiller addressed concerns about why its state-backed parent created a unit that can potentially funnel business away from the listed outfit. The candidness is welcome but not enough to avoid a governance hangover.