China Seen Widening Car-Purchase Limit to Fight Pollution; “More cities will introduce purchase restrictions. This is just the beginning of a long-term trend.”

China Seen Widening Car-Purchase Limit to Fight Pollution

China, the biggest emitter of greenhouse gases, plans to widen the number of cities curbing auto purchases to fight pollution and congestion, threatening vehicle sales, the government-backed car association said. Eight cities — Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan — will probably introduce measures limiting auto purchases, Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, said in a briefing in Beijing today, without being more specific about the timing. Such limitations could cut vehicle deliveries by 400,000 units, or 2 percent of nationwide sales, and undermine economic growth, Shi said. If introduced, the measures may triple the number of Chinese cities — Beijing and Shanghai have vehicle quotas — imposing curbs on automobiles as public anger grows over worsening congestion and air pollution.

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Investing for a rapidly changing world

July 5, 2013 6:51 pm

Investing for a rapidly changing world

By Norma Cohen, Demography Correspondent

The news on the population front often could not appear more grim – longer working lives, less spending and more saving, higher taxes, and a greater likelihood of chronic or degenerative diseases, such as Alzheimer’s. But there is a silver lining. There is a way to profit from the current unprecedented pace of population change and several large fund management groups are turning their collective hands to doing just that. Read more of this post

Seoul braces for a slowdown; S Korea is trying to find best balance between intervention and market forces at times of stress

July 9, 2013 5:46 pm

Inside Business: Seoul braces for a slowdown

By Henny Sender

S Korea is trying to find best balance between intervention and market forces at times of stress

Asia is bracing for harder times once again. “The oxygen is getting thinner,” noted Frederic Neumann, HSBC’s Asian regional economist, as he slashed growth projections for the region in a report this week. One early straw in the wind was the decision by South Korea’s new government of Park Geun-hye some weeks ago to quietly cancel the planned privatisation of Korea Development Bank, one of Seoul’s principal policy arms. The decision is understandable. As a relatively open economy that lacks the continental dimensions of its neighbour, South Korea is among the countries that are potentially most exposed to the harder economic times. About a quarter of its exports go to China. So when economic growth in its neighbour slows, South Korea also slows. Read more of this post

China Leaves Sour Taste at Yum Brands; Dependency on the Country Has Come Home to Roost After Poultry Scandal There

July 9, 2013, 6:53 p.m. ET

China Leaves Sour Taste at Yum Brands

Dependency on the Country Has Come Home to Roost After Poultry Scandal There

SPENCER JAKAB

While not quite putting all its eggs in one basket, fast-food chain Yum Brands Inc.YUM +0.70% has leaned heavily on the popularity of fried chicken in China. That dependency has come home to roost in recent months as a poultry scandal in late 2012 and then an avian-flu outbreak this spring drove customers away. Although KFCs in China account for just over a 10th of Yum’s restaurant count globally, it owns all of them and they are the bulk of a Chinese business that contributed 42% of Yum’s “segment profit” in 2012. Restaurants elsewhere are largely franchised and have less earnings impact. Read more of this post

Why China will not buy the world; The Chinese economy is marked by its dependence on others

July 9, 2013 7:26 pm

Why China will not buy the world

By Martin Wolf

The Chinese economy is marked by its dependence on others

China frightens the west. Rarely, however, do westerners look at how the world looks to China. Yes, it has made enormous economic strides. But it still sees a world economy dominated by developed economies. Among the few westerners able to look at the world from the Chinese point of view is Peter Nolan, professor of Chinese development at Cambridge university. In a thought-provoking book published last year, he addressed one of the big fears about China – that it is buying the world. His answer is no: we are inside China but China is not inside us. To understand what Prof Nolan means by this, one must understand his view of what has happened during three decades of technology-driven global economic integration. The world economy has been transformed, he argues, by the emergence, through mergers, acquisition and foreign direct investment, of a limited number of dominant businesses, almost entirely rooted in advanced countries. Read more of this post

China’s credit crunch buffets Berlin; 15 per cent to 20 per cent of German Dax companies’ earnings are China related

July 9, 2013 6:58 pm

China’s credit crunch buffets Berlin

By Ralph Atkins

Germany was the rock of stability during the eurozone crisis but it is being seriously buffeted by the economic slowdown in China. German shares have dropped much more than the European average since June 19. That was when the US Federal Reserve confirmed it wanted to scale back its asset purchases – but also when China’s credit crunch sprang to global attention, heightening worries about how Beijing was applying the economic brakes. There was more bad news yesterday when the International Monetary Fund revised down forecastsfor Chinese growth this year and next. Deutsche Bank estimates the fall in German shipments to China in the first three months of this year compared with the same period in 2012 was already equivalent to 0.5 per cent of German gross domestic product. Read more of this post

Emerging Markets Hit by IMF Forecast; Lower Growth Prospects Further Rattle Developing Nations

Updated July 9, 2013, 9:00 p.m. ET

Emerging Markets Hit by IMF Forecast

Lower Growth Prospects Further Rattle Developing Nations

ERIN MCCARTHY, CHARLES FORELLE and IAN TALLEY

Investor fears that the end of easy money is at hand are ricocheting around the globe, slamming financial markets and squeezing economic growth prospects from Brazil to Turkey. In the latest fallout, the International Monetary Fund on Tuesday trimmed its global-growth forecast, reducing its projections for emerging markets such as China and Russia. The report highlights the difficulties facing nations that recently were flooded with investor cash amid a global search for yield, but now face outflows as interest rates rise in the U.S. The IMF’s move underscores the ripple effects as markets brace for the withdrawal of central-bank stimulus policies. Scores of riskier markets have been whipsawed since Federal Reserve Chairman Ben Bernanke signaled this spring that the central bank’s monthly bond purchases, currently $85 billion, eventually will be curtailed. Many investors expect the sharp moves to continue as participants grapple with Fed policy and economic uncertainty. Read more of this post

The political nightmare of a slowing China

The political nightmare of a slowing China

The recent financial turmoil in China, with interbank loan rates spiking to double digits within days, provides further confirmation that the world’s second-largest economy is headed for a hard landing.

4 HOURS 40 MIN AGO

The recent financial turmoil in China, with interbank loan rates spiking to double digits within days, provides further confirmation that the world’s second-largest economy is headed for a hard landing. Fuelled by massive credit growth, the economy has taken on a level of financial leverage that is the highest among emerging markets. This will not end well. Indeed, a recent study by Nomura Securities finds that China’s financial-risk profile today uncannily resembles those of Thailand, Japan, Spain and the United States on the eve of their financial crises. Read more of this post

More Taiwanese firms in China heading home

More Taiwanese firms in China heading home

A growing wave of Taiwanese companies that rode the tide of cheap manufacturing in China are returning home. But they play it safe by relocating partially as costs rise in China. -ST
Lee Seok Hwai
Wed, Jul 10, 2013
The Straits Times

TAIPEI – A growing wave of Taiwanese companies that rode the tide of cheap manufacturing in China over the last three decades are returning home as costs on the mainland creep up. But they are hedging their bets by keeping most of their existing operations in China and relocating only partially or investing in new facilities – focused on research and development (R&D) or more sophisticated manufacturing – back in Taiwan, where wages have remained stagnant for the past decade because of an underperforming economy. Read more of this post

Japan’s Bullet Trains Face Challenge From Low-Fare Airlines

Japan’s Bullet Trains Face Challenge From Low-Fare Airlines

The battle between three new budget airlines in Japan is benefiting businessmen as well as tourists, as operators of the bullet trains that have dominated long-distance travel since 1964 cut prices to defend market share.

West Japan Railway Co. (9021) and Kyushu Railway Co. started reducing advance ticket prices this month by as much as 34 percent to 14,000 yen ($140) between the central city of Osaka and the southern city of Kagoshima over the next three months. Read more of this post

Bible holds lessons for future of energy; The Genesis message about preparing for harsh times should be applied to fuel production

July 9, 2013 7:11 pm

Bible holds lessons for future of energy

The Genesis message about preparing for harsh times should be applied to fuel production

The writers of Genesis understood the commodity cycle very well. When the pharaoh dreamt of seven fat cows being eaten by seven lean ones, it was a warning to prepare in the good times for harsher days to come. It is a Biblical lesson that energy policy makers would do well to relearn.

In the global oil market, we are in the fat years. Not only is the US enjoying a fully fledged oil boom, but production is set to grow in Canada and Kazakhstan, Iraq and Brazil. It is tempting to think that we are entering an “age of abundance”, in which concerns about oil security are behind us. Read more of this post

‘Abenomics’ Brings an IPO Flood

Jul 9, 2013

‘Abenomics’ Brings an IPO Flood

By Kana Inagaki

As equity fundraising slows in other Asian markets, Japanese companies such as Suntory Beverage & Food Ltd. 2587.TO +2.37% are raising billions of dollars by issuing shares, pushing capital raising in Japan during the first half of 2013 to a three-year high. Olympus Corp. 7733.TO +2.36% said Monday that it would seek to raise as much as $1.2 billion through a new share offering. Last week, advertising company Dentsu Inc. 4324.TO -0.31%and home builder Daiwa House Industry Co. 1925.TO +0.22% said they would look to raise $1.2 billion and $1.4 billion, respectively. And Suntory Beverage & Food Ltd. listed in Tokyo last week after raising $3.9 billion in Asia’s biggest initial public offering this year. Read more of this post

Japanese Fans Mourn Demise of 25-Year-Old ‘Potato Snack’; The weak yen may be a boon for exporters like Toyota but it was the last straw for Potato Snack

July 9, 2013, 10:32 p.m. ET

Japanese Fans Mourn Demise of ‘Potato Snack’

Crisp Once Came in Salami, Pudding, Octopus Flavors; Memorials, Hoarding

ELEANOR WARNOCK

A hostess at a pachinko parlor in Koshu, Japan, posed with Potato Snack. Players can select sweets and snacks as prizes for playing pachinko, or Japanese pinball.

The weak yen may be a boon for exporters like Toyota Motor Corp., 7203.TO 0.00%but it was the last straw for Potato Snack. The 25-year-old Japanese cracker, sold four in a 30-cent bag, had already been pummeled by years of stagnant demand. With the prospect of a weakening currency pushing higher costs of imported ingredients, maker Izumi Seika Co. pulled the plug on the unit that makes Potato Snack last month, to the dismay of die-hard fans. Heartbroken consumers have poured out their grief over the Internet, sending more than 100,000 tweets and uploading a score of video eulogies to YouTube. Devotees have staged farewell parties for the snack, which had a texture like deep-fried wonton and came in flavors from fried chicken to salami.

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Malaysian Stocks First From Worst on Lowest Volatility

Malaysian Stocks First From Worst on Lowest Volatility

At a time when slowing economic growth and political protests from Brazil to Turkey are spurring capital flight from emerging markets, Malaysia has turned into a refuge for equity investors.

The FTSE Bursa Malaysia KLCI Index was the biggest loser in Asia just four months ago as the closest elections in 55 years threatened the ruling coalition’s plans to spend $444 billion on infrastructure. Now the $478 billion stock market is the region’s best performer, after Prime Minister Najib Razak’s May 5 poll victory sparked a 4.2 percent rally in the KLCI index. Read more of this post

Mega-Bridge Tests Yudhoyono With Legacy in Focus; “He wants to leave these tangible, physical legacies, and the bridge is clearly one of them. The real worry is that this bridge would become a white eelephant. It would not just be costly, but it would actually blow up Indonesia’s well deserved achievement of macroeconomic stability.”

Mega-Bridge Tests Yudhoyono With Legacy in Focus: Southeast Asia

For Aat Djunaidi, a 12-hour wait to catch a ferry linking Indonesia’s most-populous islands isn’t so bad. On some trips the 41-year-old waits for two days before his truck can cross the Sunda Strait from Java into Sumatra. “If they build a bridge, it would take just 20 minutes to cross,” Djunaidi, who makes the journey three times a week to transport Suzuki motorcycles, said while waiting at the back of a four-kilometer (2.4-mile) queue. “I’d be happy if I get to use the bridge in my lifetime.” Indonesia will soon decide whether to proceed with what would be the world’s largest suspension bridge, according to Luky Eko Wuryanto, a deputy minister overseeing infrastructure projects. First conceived half a century ago, the planned 29-kilometer link that would cost an estimated $15 billion has spawned a debate over the best way to reduce logistics costs in a country with more than 17,000 islands and 250 million people. Read more of this post