HONG KONG (Reuters Breakingviews) - Rio Tinto’s job recruitment ad is getting some unhelpful input from Canberra. Australia’s treasurer wants the miner’s next chief executive and the majority of its board to be Australian, after Frenchman Jean-Sebastien Jacques stepped down over the destruction of an Aboriginal site. Cultural sensitivity is a priority, but the goal can be achieved in other ways. Shareholders deserve the best boss Rio can find.
HONG KONG (Reuters Breakingviews) - Beijing is letting lenders go belly-up as it attacks systemic risk. That’s all fine for Benjamin Fanger, founder of ShoreVest, a manager $1.8 bln of soured loans. He talks with Pete Sweeney about the message China is sending bankers, and the opportunity for foreign investors.
HONG KONG (Reuters Breakingviews) - China’s tech-focused growth boards are at risk of losing focus. Carmaker Geely wants to raise $3 billion on Shanghai’s hot STAR exchange, part of a surge of mature companies chasing stratospheric valuations on venues built for earlier-stage firms. The trend could water down Beijing’s push to help smaller, cash-strapped companies raise equity.
HONG KONG (Reuters Breakingviews) - American investors don’t appear to give a hoot about their politicians’ posturing at Beijing. Shares of Chinese companies in New York have rallied even as legislators try to delist them, and initial public offerings are popping. That may be partly investment banker greed, and perhaps traders’ short attention spans. But it’s also an implicit bet that President Donald Trump, and his crew of China hawks, are bluffing.
SAN FRANCISCO/HONG KONG (Reuters Breakingviews) - The U.S.-China tech spat is a less costly fight than the trade war. The two nations will review their deal that reduced tariffs as the White House refocuses on purging Chinese technology. The latter is nothing to celebrate, but at least the economic implications are more limited than sweeping import levies.
HONG KONG (Reuters Breakingviews) - Hong Kong will be lucky to end up like Singapore, or even a second-tier Chinese city. Police arrested pro-democracy media mogul Jimmy Lai for “foreign collusion” on Monday. Meanwhile, Chief Executive Carrie Lam’s administration has postponed elections and is purging the education system of dissidents. Businesses might have hoped Hong Kong would settle into a model resembling Singapore, where politics are authoritarian and commercial rule of law is upheld. That looks increasingly far-fetched.
HONG KONG (Reuters Breakingviews) - Beijing will let Baoshang Bank go under in the first such insolvency since 2001 – a quiet warning shot fired at Chinese financial markets. The liquidation of the municipal lender, used as a piggy bank by an insurer, will raise borrowing costs for small peers and possibly push more of them to the brink. With the economy still wobbling, it’s a risky time to cleanse the system.
HONG KONG (Reuters Breakingviews) - President Donald Trump has hit China in one of its softest spots: Tencent. The White House on Thursday said it will block “transactions” with the $687 billion tech colossus. That could cripple its payments-to-messaging app WeChat outside China and put a vast portfolio of overseas investments at risk. The ban could ultimately sting China harder than the campaign against telecoms-equipment maker Huawei.
HONG KONG/SAN FRANCISCO (Reuters Breakingviews) - Washington’s Chinese firewall is a tall order. U.S. Secretary of State Mike Pompeo wants to purge America’s internet of Chinese telecoms, apps, cloud services and more. In effect he is trying to put an information ring-fence around the People’s Republic, and wants other countries to join in.
HONG KONG (Reuters Breakingviews) - Chinese equity market regulators are growing a set of governance teeth. The Supreme Court has finally permitted shareholder lawsuits similar to the class-action litigation deployed against corporate malfeasance in the West, mostly famously in the cases of Enron and WorldCom. As other liberalisations unleash massive rallies on domestic bourses, it’s past time to deter executive abuses.