HONG KONG (Reuters Breakingviews) - American executives who prayed for a trade war truce are a disappointed lot. Following the arrest of China telco Huawei's chief financial officer in Canada, they’ve been sent to the front lines.
HONG KONG, WASHINGTON (Reuters Breakingviews) - It will take two to tango at the G20 summit in Buenos Aires. President Donald Trump and China's Xi Jinping’s supper appointment is at risk of yielding nothing. Beijing hints it won't compromise on its state-directed economic model; Washington hardliners believe their government has already conceded more than it should. Both are wrong.
HONG KONG (Reuters Breakingviews) - The relationship between Jack Ma and Xi Jinping just got a little more complicated. State media outed the founder of $400 billion Alibaba as a Chinese Communist Party member. Implying that China’s most famous capitalist is on board with the president’s agenda of exerting influence over technology companies makes good propaganda, but it may not exactly be the case.
HONG KONG (Reuters Breakingviews) - The Carlos Ghosn fiasco at Nissan hints at all the hallmarks of the bad old days of Japan Inc, starting with derisory oversight by a board whose few independent directors include a race-car driver. Auditors, Ernst & Young ShinNihon, who also looked after the books at scandal-tainted Olympus and Toshiba, may have missed something here too. Prime Minister Shinzo Abe's campaign to bolster faith in Japan Inc has hit a major speed-bump.
HONG KONG (Reuters Breakingviews) - A slump in new Asian equities is bringing some welcome sanity to valuations. Having raised a collective $62 billion in nine months via 480 listings, according to consultancy EY, overheated Asian stock markets are finally cooling off. Deals from Tencent and others are being delayed or repriced in an overdue correction. With luck, more rationality will creep in elsewhere, too.
HONG KONG (Reuters Breakingviews) - The boss of a leading Chinese e-commerce group was asked recently what job other than the current one, would be most interesting to consider. The answer: receptionist at rival Pinduoduo, "because I’d like to know how they do it." Investors may have a similar response following a report from an American fund betting against the $19 billion three-year-old firm, once dubbed the world’s fastest-growing internet seller, that claims it has been fiddling with its numbers.
HONG KONG (Reuters Breakingviews) - China’s bruised offshore currency market is scarred for life. As the yuan nears 7 per dollar, its weakest since 2008, officials are attacking short-sellers exploiting opportunities in overseas derivatives trade. The People’s Republic is trying to manage what are, in effect, two currencies: that’s an unsustainable plan.
HONG KONG (Reuters Breakingviews) - President Xi Jinping has entered Shanghai in the high-stakes race for technology stocks. China's leader granted the city a so-called "science and innovation" board. It also will test a looser U.S.-style system for new listings – an overdue reform. Yet officials may rue the volatility it’s apt to bring.
HONG KONG (Reuters Breakingviews) - U.S. Secretary of Commerce Wilbur Ross has picked the right fight with China at last. His department has put a provincial, government-backed chipmaker under an embargo similar to that which battered telecoms giant ZTE. Fujian Jinhua has been accused of IP theft by $39 billion Micron Technology. This retaliation presumes guilt. Even so, targeting small, wayward firms is smarter than blanket tariffs.
HONG KONG (Reuters Breakingviews) - Beijing is limiting its output of rare earths, according to Adamas Intelligence. That tackles lingering oversupply of the tough-to-mine minerals, but could easily also starve foreign buyers of key ingredients like cerium and neodymium, used in catalysts, electronics and weapons - a drastic trade war escalation that would punish profit margins. An overdue rush to develop new supply outside China, though, will come too late.