Pete Sweeney
Reuters Top News
Hong Kong
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Past articles by Pete:
Breakingviews: Google giggles at China tech’s shrinking act
Xi Jinping may be pleased to cut his country’s dotcom empires like Alibaba down to size. Their American rivals will enjoy watching him do it, columnist Pete Sweeney writes. → Read More
China gives itself easy GDP homework
China aims to grow GDP by “around 5%” in 2023, which might seem low given last year’s 3% marked the country’s weakest performance in decades. But in aggregate the collection of speeches and policy documents fired out on Sunday list serious problems to which Beijing offers only aspirational solutions. → Read More
Open-source software braces for trade war
The open-source software movement has been an unprecedented driver of global innovation and productivity growth. By sharing code that runs databases, smartphones and designs semiconductors for free – and letting anyone contribute to upgrading it and patching its bugs – OSS, as it is known, has spared companies from the need to reinvent countless wheels, accelerating the growth of the $475… → Read More
Bank of Japan’s new governor starts on back foot
Academic Kazuo Ueda faces a rocky time as the new governor of the Bank of Japan . He is respected but as an outsider lacks factional support within the financial bureaucracy and faces an unpopular prime minister pushing an expensive agenda. → Read More
Japan’s next central bank chief may rue promotion
Haruhiko Kuroda, who is due to depart the Bank of Japan in April after a decade in charge, will leave a host of problems for his successor to solve. The first priority is to adjust the complex system designed to keep interest rates at or below zero, which is wobbling as inflation rises. Yet the economy looks fragile, Japan Inc is reluctant to invest and geopolitical risk abounds. It might be the… → Read More
Breakingviews: U.S.-China rewarming trade is half-full of hot air
Exit bombastic Chinese foreign ministry spokesperson Zhao Lijian, relentless critic of U.S. policy, who was transferred to a quieter job in January. Enter a literal ball of hot air in the form of a Chinese spy balloon that the United States military is tracking in its home skies. → Read More
Bank of Japan has learnt danger of half-measures
Governor Haruhiko Kuroda’s battle with market forces has entered a new phase. The Bank of Japan (BOJ) made no adjustments to its yield-curve control (YCC) policy that keeps interest rates ultra-low on Wednesday. That is stinging traders who bet the central bank would be forced to widen a 10-year government bond’s trading band again, having expanded it to 0.50% from 0.25% in December under market… → Read More
China’s demographic decline can be boon, not doom
For decades foreign companies and investors flocked to the People’s Republic seeking cheap labour, new markets and, for some, weaker protections for workers and the environment. As the country looks set to lose the title of World’s Most Populous Nation to India, some capitalists are wondering whether the next China is to be found there, or Indonesia, or Mexico. Yet China’s demographic doom is… → Read More
Venture capitalists’ pain could be humanity’s gain
At its 2021 peak, the aggregate market capitalisation of cryptocurrencies was nearly $3 trillion, roughly equivalent to the economic output of Africa. A record $630 billion poured into venture capital investments that year. Now, as interest rate hikes tear into alternative assets, money going into innovation is being reallocated. → Read More
Traders will anxiously watch the Bank of Japan
Shorting the Bank of Japan is the trade of 2023. Gyrations in Japanese bond yields resulting from an abrupt increase in benchmark interest rates could force indebted domestic entities to dump overseas assets, roiling global markets. Portfolio rebalancing is already underway, but it will take a lot of really good news inside Japan for the shift to be bad news elsewhere. → Read More
China’s U.S. audit capitulation is rare win-win
The history of Sino-American diplomatic relations is not replete with unequivocal U.S. negotiating victories. On Thursday, however, the Public Company Accounting Oversight Board logged one when it announced Beijing had granted it “unprecedented” access to double-check the onshore audits of New York-listed Chinese firms, a surrender by Beijing in a battle spanning over a decade. → Read More
Betting against the Bank of Japan: podcast
Investors are closely watching for signs that Tokyo might finally start winding down its ultra-low interest rates as inflation rises. In this Exchange episode, Pete Sweeney chats with Sayuri Shirai, former BOJ policy board member, about whether and how Japan might adjust. → Read More
China decoupling takes one step forward, one back
Wealthy democracies want to cut their reliance on China. The People's Republic too has moved to become more self-sufficient. Tariffs, sanctions and suspicion have redirected flows of human and financial capital, and this week’s political protests in China may accelerate the trend. But decoupling remains more a geopolitically driven aspiration than economic fact. → Read More
Breakingviews: Protests leave China facing a terrible trilemma
Officials’ muddled response to spiking Covid cases has set off three consecutive days of demonstrations spanning cities and social classes. The government, having wasted two years prematurely congratulating itself for fending off the pandemic, is now unprepared to address the interrelated economic, health, and political crises resulting from its overconfidence. → Read More
Ackman’s Hong Kong short is logical, not likely
Pershing Square boss Bill Ackman is taking another tilt at the Hong Kong dollar , betting the government will be forced to break its link to the greenback. His logic is stronger today than when he took the plunge in 2011 but it’s up to Beijing, not Hong Kong. → Read More
Investors ignore China Covid spike at their peril
The blistering relief rally underway in Chinese equities is understandable. President Xi Jinping had implemented a mixture of harsh policies targeting Covid-19, technology entrepreneurs and real estate developers that kept equity indexes in the basement and aggravated capital flight – roughly $101 billion was pulled out the country, reading between the lines of official balance of payments data… → Read More
China’s property easing is minor capitulation
Beijing has rolled out more measures to support its flagging real estate sector, including extending repayment periods, facilitating financing for developers and lowering mortgage down-payments. That accelerated a rally in related shares and bonds on Monday. While the measures will stave off an imminent wave of defaults, a rescue this is not. → Read More
Japan lives at the bleeding edge of good enough
With growth slowing, demographics depressed and the trade balance in deep deficit, Tokyo wants to incubate startups and put more state money into cutting-edge sectors like semiconductors and next-generation telecommunications. Prime Minister Fumio Kishida says he will put innovation and scientific research at the “centre” of his policy push. Perhaps it shouldn’t be. → Read More
China’s foreign customers leave at worst time
Chinese exports shrank 0.3% in October for the first time since May 2020, as softening demand in key U.S. and European markets finally took their toll on a sector that had done much to offset weak domestic demand and tanking property. Officials in Beijing now have the choice between easing up on harsh Covid-19 controls or risking an accelerating downward spiral. → Read More
China investors desperately seek market bottom
Tuesday’s may have been based on rumour. But in offshore markets, the value discount on offer is so extreme it makes gambling on false hopes less risky than it might otherwise be. → Read More