HONG KONG (Reuters Breakingviews) - China’s political system has weak immunity to viruses. A bungled swine flu cover-up doubled pork prices last year. Now a mysterious outbreak of pneumonia is panicking citizens just days before the start of what’s usually a $150 billion spending boom: the lunar new year holiday. President Xi Jinping’s corruption purge may have made officials less venal, but not, apparently, more credible.
HONG KONG (Reuters Breakingviews) - Chinese shadow banking is poised for a comeback. GDP grew 6.0% last quarter, but credit growth disappointed as campaigns to cut bad debt while pushing banks to lend to risky small firms resulted in financial muddle. Informal channels are starting to fill some of the gap for healthier parts of the private sector, but at dangerously high rates.
HONG KONG (Reuters Breakingviews) - China’s reform camp is toasting Wall Street’s trade war win. Beijing has further committed to open its financial sector as part of the so-called phase one of a U.S.-China trade deal signed on Wednesday. The promise to import an additional $38 billion in U.S. services by 2021 follows other liberalisations in the sector, and will mean Chinese institutions could soon face serious American competition. That could benefit both sides.
HONG KONG (Reuters Breakingviews) - Charles Li is worried about the Hong Kong Exchanges and Clearing, but not very. Speaking at a Breakingviews Predictions event on Thursday, the stock exchange’s chief executive said he’s confident the HKEX’s – and by extension, the financial centre’s - awkward relationship with mainland markets will remain. “We are that magical gear [in the middle of] two big wheels,” he said – the wheels being China and foreign investors. A 23% rally in the company’s share price since September, despite an 8% fall in third-quarter earnings from a year ago, suggests investors agree.
HONG KONG (Reuters Breakingviews) - It's a face-saving escape. Carlos Ghosn’s Tokyo jailbreak will spare many embarrassments. The former boss of the Nissan-Renault automotive alliance, awaiting trial on charges of financial misconduct, skipped a $9 million bail bond and popped up in Lebanon. How he evaded his minders is a story still to be told, but his exit lets Tokyo, Paris, and his former employers end a mutually embarrassing diplomatic affair.
HONG KONG (Reuters Breakingviews) - Anti-government protests in Hong Kong have weakened China’s gateway to international markets in the midst of a trade war. Past attempts to make neighbouring Shenzhen a free-market alternative have been half-hearted. Unrest in the former British colony gives officials cause to try again.
HONG KONG (Reuters Breakingviews) - China may debut the breakout fintech innovation of 2020. Beijing is primed to launch the world's first digital sovereign currency. The initial roll out looks cautious, focusing on consumer spending. Deploying the new technology more widely in the country's banking system could be the disruptive next step.
HONG KONG (Reuters Breakingviews) - China’s Communist Party will hit its self-imposed economic targets in 2020. The government led by Xi Jinping will be able to boast of doubling incomes and real gross domestic product in the decade from 2010, while eliminating extreme poverty. That’s a laudable achievement.
HONG KONG (Reuters Breakingviews) - Traders resent expensive tools like Bloomberg and Eikon, but they need them to chat. Goldman-backed Symphony, at $20 a month, wants to break in. CEO David Gurle talks about the challenges of compliance, his deal with China’s Tencent, and the future of finance software.
HONG KONG (Reuters Breakingviews) - China may yet rue stepping up to the U.S. National Basketball Association. State television will no longer screen preseason exhibition games held in the country, it said this week, after an executive tweeted in support of anti-government protesters in Hong Kong, and NBA boss Adam Silver defended him. A lucrative business is at stake, but the league is pushing back anyway.