China Poses Global Growth Risk

As Premier Li continues to squeeze credit, investors worry about the global effect of a slowing Chinese economy.

China’s attempt to balance its economy, without breaking it, puts global growth at risk should policy-makers fail.

Premier Li Keqiang’s three-month-old government is allowing the tightest squeeze on credit in at least a decade, to wean the nation off a cash binge that threatened to destabilize the world’s second-largest economy.

Fed Impact

“We’ve relied on the Fed and China so much over the last few years, so any signs that either might be less supportive is taken negatively—and we got both of those over the past week,” said Oliver at AMP.

Steadier Economy

It’s a view shared by David Loevinger, former senior coordinator for China affairs at the U.S. Treasury Department and now an emerging markets analyst in Los Angeles at TCW Group Inc.

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