Why do foreign brands ‘Break Bad’ in China?
BEIJING | By Tang Jinghong via Caixin | Multinationals like McDonald’s and KFC hop from one scandal to another in China, which says a lot about our problems handling food safety issues.
World economy
In some cases the central bank cannot control inflation…
SAO PAULO | By Marcus Nunes via Historinhas | …while in others it cannot promote it! Japan falls in the latter category. According to this article in the WSJ “Japan´s price target looks difficult.” The nationwide core consumer price index rose 1.3% from a year earlier in June, after adjustment for a recent sales-tax hike, below a 1.4% increase the previous month, according to government data released Friday. Inflation moderated in May and June due to falling energy prices and a stable yen, which has put the break on growth in import costs.
UBS: Fed realizes a reverse repo program isn’t the answer
MADRID | The Corner | The continuous U.S. labor market upturn (on average 213K jobs/month were created so far this year) paves the way for the consumption and investment growth. The economy strength and the employment trend enabled the Fed to continue to reduce the QE program even after the weak beginning of the year. But apparently the Fed itself is still far from consensus.
War lessons
MADRID | By Álex García.
Risk: Geography trumps Economy
WASHINGTON | By Pablo Pardo | Geopolitics have returned with a vengeance in Europe right when Barack Obama’s economist view of international relations seemed to be on track with the negotiations for the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP). The IMF warns that geopolitical risk is back on stage.
How the hammer falls as China nails corruption
BEIJING |By Gao Yu and Wang Heyan via Caixin | Curiosity is one reason the website of the Central Discipline Inspection Commission (CDIC) attracts up to 2 million page views every day. Another reason is fear. Some website visitors, for example, want to know whether they or anyone they know has been targeted by a government campaign to root out corruption led by the CDIC Inspection Team.
Will the Bank of Japan act again?
MADRID | The Corner | Will the Japanese Central Bank act again to raise inflation expectations and get inflation to reach its target of 2%? Some analysts believe the BoJ should allow the economy to overheat a little in order to promote higher inflation expectations. “Kuroda is convinced that the country will reach its inflation target of 2% in the FY2015,” experts at JP Morgan pointed out on Thursday, “but the help of the yen’s depreciation is fading since expectations of further monetary expansion are lowering too.”
Can’t live without Russian gas (yet)
MADRID | The Corner | The EU released on Wednesday a target to improve energy efficiency by 30% as part of a package of climate and energy policy for 2030, and a measure that some considered “a gift to Mr Putin.” The truth is Europe says it is on the verge to impose sanctions to Russia for the downing of Malaysia Airlines Flight 17, although it has been reluctant to use US-stule sanctions in the past due to its high dependence on Russian gas -see this chart by Statista which shows the deep interconnection-. But there seems to be a way for the Old Continent to wear off any gas cuts if things gets really nasty: liquefied natural gas (LNG). For countries like Spain, it would be a golden opportunity.
What China’s premier asks in meetings with economists
BEIJING | By Liu Shengjun via Caixin | When China’s premier Li Keqiang recently met six experts to talk about reforms, he quizzed them on their data and bemoaned slow progress in changing local governments.
China embraces credit expansion
MADRID | The Corner | The world’s second economy is entering an enthusiastic summer period, with credit lending indicators rising in June. New loans denominated in yuan grew up by 1.08 bn CNY in China, aggregate financing went up by 1.97 bn CNY and the M2 monetary offer, in 14.7% year on year in June. All these data exceeded market expectations and show that the authorities are favoring the expansion of credit to boost growth.