HONG KONG (Reuters Breakingviews) - China’s oil majors are filling up at the right time. PetroChina’s losses on gas imports swelled last year, thanks to low rates at home. Yet the $200 billion behemoth and rivals are preparing to buy more liquefied natural gas from the United States anyway. It’s a good way to help defuse trade tension, of course. More importantly, the purchases can lock in supply before an expected shortfall.
HONG KONG (Reuters Breakingviews) - Dianrong’s boss has daringly said what many are probably thinking. Guo Yuhang, co-founder and co-chairman of one of China’s biggest peer-to-peer lenders, blamed the government for his company’s sluggishness. Such regulatory grievances are common from bankers elsewhere, but rare in China. The complaints will strike a chord in the industry even if they don’t alter the course of mercurial rules.
HONG KONG (Reuters Breakingviews) - Ping An’s share repurchase comes with a Beijing twist. China’s biggest insurer by market value plans to buy up to $1.5 billion of its Shanghai shares. The company, which has a Hong Kong listing too, says it’s undervalued. But this transaction also responds to an official push to bolster mainland markets. Shareholders benefitted this time, but such policy winds can blow both ways.
BEIJING (Reuters Breakingviews) - Beijing is striking the right balance on stimulus. The government lowered its growth target at the opening of its annual parliament and rolled out a big tax cut. It also signaled that officials will keep a hawkish eye on debt. It’s an effective, if awkward, way to support the economy.
HONG KONG (Reuters Breakingviews) - It’s time for a treaty on the yuan. The United States paid a price for Beijing’s past manipulation, and making currency policy part of any future trade deal is a good idea. Although the world’s second-largest economy gets fewer benefits from a suppressed rate than it once did, another round of forced depreciation is not inconceivable.
HONG KONG (Reuters Breakingviews) - China’s curbs on Australian coal are sending some smog into the southern hemisphere. At least one big port appears to have barred imports of the stuff from Down Under, and customs delays have been lengthening. Beijing has used such tactics in the past to reduce stockpiles and support domestic prices. But denting a top export earner is likely to be interpreted as a diplomatic message too, when ties with Canberra are already strained.
HONG KONG (Reuters Breakingviews) - Sometimes money isn’t enough. Beijing may offer to buy more semiconductors from the United States, a move that underscores the challenges it has faced in its bid to make advanced ones at home. Industrial policies like Made in China 2025 draw fury abroad, but the People’s Republic’s scant progress in churning out high-tech chips suggests it’s unclear if such measures even work.
HONG KONG (Reuters Breakingviews) - Chinese banks are wise to resist maxing out their credit cards. Lenders have issued hundreds of millions of them to local consumers, facilitating debt-fuelled shopping sprees. It’s a lucrative but risky supplement to other types of loans, and some now appear to be pulling back.
HONG KONG (Reuters Breakingviews) - Foxconn’s embarrassing reassessment of its ambitious U.S. plans offers a lesson in basic economics. The iPhone maker and Wisconsin taxpayers made a big bet on a manufacturing revival in the United States less than two years ago. Now Terry Gou’s outfit says making flat screens there is uncompetitive, and most of the jobs will in fact be in research and design. It’s a reality check for U.S. President Donald Trump’s industrial dream.
HONG KONG (Reuters Breakingviews) - China’s stock markets could use a more ambitious overseer. State media reported over the weekend that the head of the country’s securities regulator, Liu Shiyu, would be replaced by Yi Huiman, Industrial and Commercial Bank of China’s chairman. Stability often took precedence over bigger changes under Liu, an approach that achieved only mixed results.