Beijing finds new friends in Zimbabwe

CHINA has had friendly ties with Robert Mugabe, Zimbabwe’s president, since his days as a Maoist guerrilla leader fighting white rule in the 1970s. Decades later, as he suppressed the opposition and ruined his country, China helped to protect him from sanctions at the United Nations, sold him weapons and even built his palace. But its favour, never unconditional, seems to be shifting.

On June 30th it was Mr Mugabe’s biggest foe, Morgan Tsvangirai—with whom he has awkwardly shared power in a unity government since February—who announced that China had offered Zimbabwe $950m in loans. This is well in excess of the nearly $500m Mr Tsvangirai said he had obtained in pledges of various kinds during a tour of Western capitals. ...

After a long period of inactivity, China’s equity market reopens

IT IS like a downpour after a drought. In 2007 and early 2008, hundreds of Chinese companies worked feverishly with accountants and bankers to prepare for initial public offerings. Their work came to nothing. Collapsing share prices, a contracting economy, unrealistic expectations on the part of sellers and, finally, restrictions from regulators crushed the IPO market. Now the companies and bankers that have managed to survive a brutal year are once again seeking capital, through listings on bourses in the mainland and beyond.

The first raindrop in China has been Guilin Sanjin, a manufacturer of Chinese medicine, which is expected to issue shares on June 29th on the Shenzhen Stock Exchange, the market for the country’s smaller companies. The size of the offering is likely to be a bit under $100m—a mere rounding error compared to the mega-deals of two or three years ago, but a sign, nonetheless, that business has resumed. ...

Can Asians replace Americans as a driver of global growth?

ASIA’S emerging economies are bouncing back much more strongly than any others. While America’s industrial production continued to slide in May, output in emerging Asia has regained its pre-crisis level (see chart 1). This is largely due to China; but although production in the region’s smaller economies is still well down on a year ago, it is rebounding in those countries too. Taiwan’s industrial output rose by an annualised 80% in the three months to May compared with the previous three months. JPMorgan estimates that emerging Asia’s GDP has grown by an annualised 7% in the second quarter.

Asia’s ability to decouple from America reflects the fact that the region’s downturn was caused only partly by the slump in American activity. In most Asian economies falling domestic demand was more important than the drop in net exports in explaining the collapse in GDP growth. The surge in food and energy prices in the first half of 2008 squeezed profits and spending power. Tighter monetary policy aimed at curbing inflation then further choked domestic demand. ...