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  • strict warning: Non-static method view::load() should not be called statically in /home1/finfacts/public_html/sites/all/modules/views/views.module on line 879.
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China's rebalancing and impact on the world economy

China's move to rebalance its economy was driven home on Thursday when the banking sector woke up to a credit crunch with short-term interest rates rising to double-digit levels and manufacturing PMI (purchasing managers' index) was shown to have fallen for the ninth straight month. On Friday, China eased its credit crunch, with money rates falling after reports that the People’s Bank of China, the central bank, had acted to alleviate market stresses. However, interbank conditions remained tight and analysts said the PBoC would continue its tough stance of recent days to compel financial institutions to pare back their leverage. In the past week, we have reported that China had an annual deficit of 10% in 2012 and several manufacturing sectors are struggling with excess capacity because of high public subsidies. With another major growth engine under stress, what will the impact be on the rest of the world of a dip in China's growth?
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