Signs that powerhouse China is slowing have spooked global markets and sharpened fears that the world economy will not escape another recession. The dramatic stock market fallout from one small,preliminary survey of Chinese manufacturers far exceeded the datas importance,analysts said Friday. The worlds No. 2 economy is slowing,as expected,but growth will remain relatively strong,they say. If nothing else,the market rout that began on Thursday and continued Friday reflects Chinas growing importance for world growth,said Xianfang Ren,chief China economist for IHS Global Insight. A preliminary reading of HSBCs index of manufacturing for September,released about a week before the final survey is due,was at a two-month low of 49.4 and like Augusts reading of 49.9 is under 50 indicating that activity is contracting. An official manufacturing index that surveys a bigger number of companies is also due about the end of September. The HSBC survey and weak indicators from other major economies prompted panicked selling by global investors afraid that governments hamstrung by debt crises,inflation and unemployment may be unable to avert a recession. But the HSBC survey is only a monthly snapshot,ill-suited to indicate long-term trends,said Ren. It also is heavily weighted toward exporters,who are bound to be feeling cautious given the current global outlook but is not a reliable measure of the broader economy,said CLSA analyst Andy Rothman. If you look at other measures of whats happening in China . everything is cooling down,but not dramatically,and theres still strong growth, Rothman said. Most forecasters pick economic growth of above 9 per cent this year and between 8.5 per cent and 9 per cent next year. As one of the few big economies that is expanding at a rapid clip,Chinas role in powering world growth is significant. Thats especially so for Australia that is heavily dependent on Chinas demand for minerals they export and for export reliant economies in Asia.
