HONG KONG (Reuters Breakingviews) – In 1883 German philosopher Friedrich Nietzsche wrote of a character he called “the last man”. The opposite of his ideal “Ubermensch”, last men are so enervated and addicted to comfort, they lose their ability to dream and their will to compete. To Japanese conservatives, Nietzsche might have been describing Japan during the lost decades that followed the bursting of its financial bubble in the early 1990s: a pacifist, embarrassed, ageing irrelevance overshadowed by rising China. Until Shinzo Abe came along.

In “The Iconoclast: Shinzo Abe and the New Japan” Tobias Harris delivers an engaging review of the extraordinary career of Japan’s longest-serving prime minister. He was the heir to a conservative political dynasty, he dragged the country out of deflation, partially remilitarised it, and reconfigured the state in the process. Harris, an analyst at Teneo Intelligence who briefly served as private secretary to Japanese politician Keiichiro Asao, delivers a positive, nuanced assessment. However, readers less grounded in Japan’s political history might benefit from some background reading before wading in. (Who, exactly, were the “right-wing socialists”?)

Abe, who announced his retirement for health reasons in August, reinforced Tokyo’s position as Washington’s premier ally in Asia, and managed the relationship with a semi-hostile Donald Trump surprisingly well. When the White House abandoned the Trans-Pacific Partnership trade pact, Abe took the lead, ratifying a deal that lowered trade barriers between major economies in Asia and the Americas. He reinforced Japan’s position as a source of investment and aid to poorer neighbours as an alternative to China’s “Belt and Road” initiative.

Abe has handed the reins to Yoshihide Suga, a long-time ally who helped craft the combination of unorthodox monetary policy, fiscal stimulus and reform that came to be known as Abenomics. The new prime minister has


HONG KONG (Reuters Breakingviews) – China’s second-largest developer Evergrande has frightened creditors owed nearly $15 billion into converting obligations into unlisted shares. Details are scant, but this marks another miraculous escape for founder Hui Ka Yan regardless. The fact that creditors accepted this deal highlights how real estate has trapped policymakers.

Earlier in September Reuters reported that Evergrande had sent a letter to the Guangdong provincial government asking for accelerated approval to float subsidiary Hengda Real Estate via reverse merger. It warned of risk to China’s financial stability if Evergrande failed to meet a January listing deadline, which would have triggered some 144 billion yuan in payments to backers like electronics retail giant Suning. Evergrande said the letter is fake. But the developer’s situation is undeniable – 400 billion yuan of short-term debt as of June – and Evergrande stock and bond prices fell in response to the report.

Yet within few days Hui had managed to persuade creditors holding 80% of the obligations, including Suning’s chairman Zhang Jindong, to appear behind him during a signing ceremony in which they pledged to renounce their claim to payment and retain shares in unlisted Hengda instead. That sounds like a much worse deal, especially since the listed state-owned developer that was supposed to reverse-merge with Hengda is showing signs of very cold feet. On Sept. 27 it reiterated that such a restructuring would be “unprecedented”.

Chinese officials appear averse to letting Hui cut debt levels – already in excess of Beijing’s “three red lines” – by foisting risk onto retail stock investors. But knowing that, why did so many Evergrande creditors accept a proposal that converts hard cash payments into hard-to-offload equity stakes? It’s possible the offer was sweetened with higher dividends, but not everyone is biting: state-owned Shandong High


NEW YORK/LONDON/MILAN/MELBOURNE (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.


– Macy’s and Klarna

– UK companies and debt

TAKEAWAY. The Great Depression popularized layaway plans, where shoppers paid for items in installments and then took them home when paid in full. The pandemic is universalizing the reverse – and Macy’s wants in. The $2 billion retailer is joining the likes of Silver Lake and Snoop Dogg and investing in Klarna, the Swedish payments group, and under a five-year partnership, customers can pay in four interest-free installments after purchase.

Nearly a century may separate the two financing inventions, but the consumer impetus is the same. Consumers’ wallets are shrinking, and they are looking to spread out payments. Likewise, retailers are desperate for sales, and buy-now-pay-later plans do that in exchange for giving away a cut. So far, everyone is happy, especially Klarna, which was valued at nearly $11 billion in a September funding round.

But unlike layaway plans, which forced customers to be thrifty by forgoing consumption until the item was paid for, these plans encourage immediate gratification. A harder recession, or regulation to protect consumers, may bite them. (By Robert Cyran)

DEBT PANDEMIC. Britain’s small and medium-sized firms are drowning in debt just as Prime Minister Boris Johnson tightens coronavirus restrictions. Data from UK Finance, a bank trade association, showed on Tuesday that SMEs borrowed 40 billion pounds from the seven largest lenders in the first half of 2020. That’s almost double the 24 billion pounds they borrowed in the whole of 2019. Government-backed schemes, like Bounce Back Loans, helped.

Given cash-strapped SMEs have already maxed out on credit as their first line of defence, new lockdowns may do more


NEW YORK/MILAN/HONG KONG/LONDON (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.


– NYC’s new cases

DON’T FORGET ABOUT IT. New York City’s positive Covid-19 test rate hit 3.25% on Tuesday, said Mayor Bill de Blasio, the highest since June. The Big Apple was an early hotspot, and its four largest counties have racked up over 223,000 confirmed cases, according to Johns Hopkins University. But it had made a dramatic turnaround – with weeks of daily rates mostly between one and two percent. And limited indoor dining is just starting on Wednesday – giving the city’s economy a jolt it desperately needs.

The setback doesn’t have to be catastrophic. Around a quarter of new cases in the past two weeks are confined to only nine zip codes, which contain less than 8% of the city’s population, according to the New York Times. The main culprit seems to be populations violating mask rules, not reopening measures like outdoor dining. So the mayor doesn’t need to reverse course; he just needs to make sure New Yorkers cover up. (By Anna Szymanski)

BITE SIZE. The pandemic has thrown confectionary giant Ferrero a tasty treat. The maker of Nutella chocolate spread and Kinder eggs may swallow UK-based Fox’s Biscuits, says Sky News. Though the family owned Italian group won’t comment, a deal would fit its strategy of diversifying from chocolate confectionary into packaged sweets. Ferrero, which earned 11.4 billion euros in revenue last year, could easily afford the reported price tag of 250 million to 300 million pounds.

For Fox’s owner, a sale may also make sense. The maker of Crunch Creams and Viennese has done well while Britons snacked at home during lockdown. But it’s a

A Logistics self-driving truck is displayed at China International Fair for Trade in Services in Beijing, China, May 28, 2019. REUTERS/Jason Lee

HONG KONG (Reuters Breakingviews) – might look slightly unloved after completing its hyped-up spinoffs. The Chinese web retailer’s market cap has more than doubled to $117 billion this year. That has been helped by expectations for listings of its health, financial technology and logistics units which might account for almost half of JD’s equity value. The downside is it prices up a so-so worth for its outperforming e-commerce business.

Shares of New York-listed JD are up 116% in 2020, smashing the gains of the S&P 500 and most Chinese technology peers including e-commerce rival Alibaba. A secondary Hong Kong listing in June helped, as has the company’s Amazon-like pandemic-resilient business. Investors are also pricing in boss Richard Liu’s more exciting ventures in financial technology and healthcare.

JD Digits, the 37%-owned affiliate that specialises in consumer credit and supply-chain financing, has filed to raise 20 billion yuan ($2.9 billion) in Shanghai by selling 10% of its enlarged share capital. Meanwhile, JD recently confirmed plans to list its e-pharmacy in Hong Kong, and is targeting a $20 billion valuation, Refinitiv publication IFR says. JD’s promising logistics arm might be next too. The company has already tapped banks for an up to $10 billion IPO that could value the subsidiary at over $30 billion, Reuters reported in December, citing sources.

JD’s stakes in the three businesses could be worth $53 billion combined, based on the mooted valuations. What’s left, after backing out the group’s $8 billion-plus net cash pile, is JD’s core business. Analysts at HSBC reckon the segment will generate roughly $3 billion in adjusted earnings next year. That implies investors are valuing the rump, JD Retail, at