HONG KONG (Reuters Breakingviews) - Donald Trump is firing a parting shot at Beijing. To stop more money from flowing into the People’s Republic, the lame-duck U.S. president signed an executive order to block U.S. investment in Chinese companies deemed to be military-backed. The decision creates another headache for American fund managers and momentum for further decoupling that may be hard to roll back.
HONG KONG (Reuters Breakingviews) - China's latest five-year blueprint suggests President Xi Jinping is girding for battle. Despite the recent economic rebound from the pandemic, the tone from the ruling Communist Party’s closed-door meetings was notably less cheerful than in 2015. Although details are scarce for now, Beijing is intensifying preparations for geopolitical and corporate arms races.
HONG KONG (Reuters Breakingviews) - American elections are closely watched in China, but this time the outcome of the U.S. presidential election on Nov. 3 may matter less to Beijing. U.S. President Donald Trump’s tough act on China has wrought little real damage. And while neither he nor his challenger, former Vice President Joe Biden, is likely to thaw relations, the fumbling of the pandemic has left the U.S. more at risk.
HONG KONG (Reuters Breakingviews) - China's gross domestic product rose 4.9% year-on-year last quarter, slightly missing expectations but still music to the ears of policymakers worried about unemployment and souring loans. Beijing has already signalled it might tap the brakes on monetary easing as the economy warms, and this could accelerate the process.
HONG KONG (Reuters Breakingviews) - Hong Kong’s rival sister city of Shenzhen is vulnerable at the rear. During a visit this week, President Xi Jinping said he will give the technology hub more autonomy. Relaxed capital controls and other policy preferences will help it serve Xi ’s technology self-sufficiency goals. But even as its financial markets liberalise, its distorted property bubble is putting its innovation advantage at risk, allowing other mainland cities to poach talent and investment.
HONG KONG (Reuters Breakingviews) - Investment banking in China is becoming increasingly cutthroat. To keep up, China International Capital Corp wants to raise about $1 billion in a Shanghai secondary listing. The capital could help it fend off Wall Street rivals and fund mergers as officials push industry consolidation. As local peers also race to become super-brokerages, a lot is riding on the flotation.
HONG KONG (Reuters Breakingviews) - China’s second-largest developer Evergrande has frightened creditors owed nearly $15 billion into converting obligations into unlisted shares. Details are scant, but this marks another miraculous escape for founder Hui Ka Yan regardless. The fact that creditors accepted this deal highlights how real estate has trapped policymakers.
HONG KONG (Reuters Breakingviews) - The time has come for China to confront a too-big-to-fail quandary. In a letter to local government officials, highly indebted property developer China Evergrande contends that if it doesn’t secure approval soon for its reverse merger plan, it will wreak widespread havoc. Although the company says the missive is fake, the questions in it regarding systemic risk are real for investors and Beijing.
BEIJING Months after China brought its coronavirus epidemic under control, its consumers are slowly opening their wallets again - but the hard days of lockdowns still weigh on many shellshocked lower-income households, who prefer to hold on to their cash.
HONG KONG (Reuters Breakingviews) - The streets of China are getting paved with baijiu. Chinese liquor titan Kweichow Moutai plans to issue bonds to help buy highway operator Guizhou Expressway from the struggling local government. This ludicrous diversification erased $10 billion of market capitalisation.