China property market may be deflating or worse; Europe court gives 'right to be forgotten' online; Governance, not corruption, was India poll issue

1 China property market may be deflating or worse (Linda Yueh on BBC) Latest figures show a continued slowdown in credit in China. Aggregate financing, which captures allegedly both official and unofficial lending, fell to $249bn last month. It's pushing down property prices as intended, but could it also burst a bubble?

In one respect, it's not a surprise. One of the features of liberalising a market is that prices shoot up. It's what happened in other economies transitioning from central planning. So, once the market is liberalised, there's inflation. And that's what happened in China. It was only in 2001 when the real estate market was fully launched. Until then, housing was allocated by a person's state-run employer, known as a work unit or danwei.

Nomura estimates that prices have fallen in the smaller cities even while big tier 1 cities like Shanghai continue to see price rises. It's why they and some other analysts think that the property bubble has burst. Also, new building construction fell 25% in the first quarter of the year. Since property accounts for a staggering 16% of GDP, it was one of the contributors to economic growth slowing to 7.4%.

Plus, land sales in 20 major cities have dropped 5% from a year earlier. That is adding pressure to local governments which derive an eye-watering 61% of revenues from selling land. Without that revenue, they would be tempted to turn to banks and borrow via off-balance sheet vehicles. That's a problem as the opacity of local government debt is a recurring concern.

The best case for China is that property prices moderate. The worst case is that loans are not repaid which drags down the banks. Those in the West know all too well how that ends.

http://www.bbc.com/news/business-27387691

2 Europe court gives ‘right to be forgotten’ online (Toby Sterling in San Francisco Chronicle) Europe's highest court Tuesday gave people the means to scrub their reputations online, issuing a landmark ruling that experts say could force Google and other search engines to delete references to old debts, long-ago arrests and other unflattering episodes.

Embracing what has come to be called "the right to be forgotten," the Court of Justice of the European Union said people should have some say over what information comes up when someone Googles them. The decision was celebrated by some as a victory for privacy rights in an age when just about everything — good or bad — leaves a permanent electronic trace. Others warned it could interfere with the celebrated free flow of information online and lead to censorship.

The ruling stemmed from a case out of Spain involving Google, but it applies to the entire 28-nation bloc of over 500 million people and all search engines in Europe, including Yahoo and Microsoft's Bing. It has no immediate effect on the way Google and other search engines display their results in the US or other countries outside Europe.

Google has long maintained that people with such complaints should take it up with the websites that posted the material. But persuading websites to drop material can be difficult and time-consuming. The EU ruling would presumably make it easier by putting the burden on search engines.

http://www.sfgate.com/business/technology/article/European-court-Google-must-yield-on-personal-info-5473233.php?cmpid=hp-hc-bustech

3 Governance, not corruption, was India poll issue (Neeta Lal in Khaleej Times) The biggest takeaway from the mammoth general elections exercise in India — inarguably the most important one for the country since Independence in 1947 — has been that it is not entrenched corruption (as was preconceived), but the governance deficit and lack of job and economic opportunities, that are playing on the minds of the voters.

In survey after survey, the young demographic cite paucity of jobs, and lackluster economic parameters as most niggling worries. In televised interviews, many even frankly admitted that they’d rather have a corrupt but dynamic government at the Center than an honest and an inefficient one!

What does this tell us about the general mood? That the government that assumes power to form the 15th Lok Sabha (lower house) must swiftly fast track economic growth and facilitate an enabling environment for job creation.

The two most-watched protagonists of the main political parties — Rahul Gandhi and Narendra Modi — have hardly dwelt on the corruption issue. Former Bihar chief minister Laloo Prasad Yadav, and Congress’ estranged coalition partner Jaganmohan Reddy of the YSR Congress — both of who were jailed in corruption scams — have got a rousing welcome from the public. This is a clear signal that the electorate is rooting for them because of their administrative acumen and perceived earnestness to work for public good.

Data from the Association for Democratic Reforms, a transparency group compiled over a 10-year period shows that an increasing number of candidates facing criminal charges are also being fielded by political parties at all levels of elections, including state polls. The analysis revealed that a candidate with a criminal case had a 23 per cent chance of winning elections while an honest one lagged behind with chances of nearly half — just 12 per cent.

Worse, findings showed that a candidate’s winning potential surges with the seriousness of the charges against him. For instance, those without a criminal case had a seven per cent chance of winning, which ratcheted up to 19 per cent if the candidate had at least one ordinary charge. For those facing a serious charge, such as murder, the winning chance shot up to a whopping 25 per cent.

http://khaleejtimes.com/kt-article-display-1.asp?xfile=data/opinion/2014/May/opinion_May21.xml&section=opinion