Salient to Investors: William Pesek writes: China is very susceptible to Japanization, and only bold and creative action can avoid it. However, for every pledge to cut excess production capacity, audit government borrowings and tolerate sub-8 percent growth, two others assure markets that growth won’t be allowed to slow too much. Japan
READ MORE... →Salient to Investors: Zeng Xianzhao at Everbright Securities said investors are getting mixed signals on the property market and the uncertainty over real-estate policies is dragging the industry lower which in turn is pulling the main index down. Zeng said there is still uncertainty about the strength of the economy. Rhee Chang Yong
READ MORE... →Salient to Investors: Jim O’Neil writes: In April, the BRICS said they would build their own development bank. Their difficulty in cooperating is simply because they are not very alike. Brazil, Russia, India and China are the world’s largest emerging economies, while China is bigger than all the others put together – China effectively
READ MORE... →Salient to Investors: 50% of surveyed economists say non-performing local-government and corporate debt will significantly impact China’s credit and economic growth, and expect China to deal with bad loans at local governments in the next 18 months by expanding the muni-bond market and letting localities refinance with direct bond sales. JPMorgan
READ MORE... →Salient to Investors: William Pesek writes: Former George Soros advisor Takeshi Fujimaki said Abe delaying increasing Japan’s sales tax would worsen Japan’s debt profile, while Fed tapering would cause a fresh credit crunch that would slam Japan’s bond market. When Li Ka-Shing, Asia’s richest man, is turning to Europe as Hong Kong
READ MORE... →Salient to Investors: William Pesek writes: Asia sits on almost $7 trillion in currency reserves, much of it in dollars as its central banks engaged in a kind of financial arms race after a 1997 crisis. Asia now has more weapons against market unrest than it knows what to do with
READ MORE... →Salient to Investors: William Pesek writes: Najib kept his Malaysian coalition in power with a giant spending spree that included smartphone rebates for youths, household electricity subsidies and higher wages for civil servants. Fitch said Malaysia’s public finances are its key rating weakness. It will be difficult to achieve the 3
READ MORE... →Salient to Investors: William Pesek writes: Concerns that China is heading into a turbulent period are soundly based. No one knows if China is cascading into a crisis, not even Premier Li Keqiang. In July, the Broad Group broke ground on the world’s tallest building, expecting to build it in 90
READ MORE... →Salient to Investors: Sudakshina Unnikrishnan and Jian Chang at Barclays say should China’s growth dip to 3 percent in the next 3 years, copper would fall more than 60 percent, zinc by up to 50 percent, and oil to $70 a barrel. They cite risks of slowing industrial production and of financial stress due to debt of
READ MORE... →Salient to Investors: Ding Shuang at Citigroup said local-government debt is a source of concern about China’s growth, and the new leadership is trying to give a clear answer as confidence in the Chinese economy from all sides has weakened. Ding said China has at least 12 trillion yuan of local-government debt. Zhu Haibin at
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