China Expects U.S. Financial Crisis to Spill Over, Its GDP Growth to Slow

[marmar]

from Bloomberg:



China Says Global Woes May Spill Over, Growth to Slow (Update1)

By Zhang Dingmin and Zhao Yidi

Sept. 27 (Bloomberg) -- The U.S. financial crisis will crimp consumption and spill over to the rest of the world including China, according to bankers and government officials meeting at the World Economic Forum in eastern China's Tianjin.

``We are in the worst crisis since the Great Depression,'' said Citigroup Inc.'s Senior Vice Chairman William Rhodes. ``We are in a period of a tremendous lack of confidence'' where financial institutions require fresh funds to restore consumer trust, he said.

U.S. Treasury Secretary Henry Paulson has proposed a record $700 billion rescue package for U.S. financial institutions and the Securities and Exchange Commission banned short selling of insurance, bank and brokerage stocks. The unprecedented bailout has raised concern in China, prompting officials including bank regulator Liu Mingkang to slow the introduction of new financial products such as derivatives and futures contracts.

China's annual economic growth may slow to between 9 percent and 9.5 percent, Liu said without specifying the period, as the U.S. financial crisis may crimp consumption, affecting global growth. China's 2007 economy expanded 11.9 percent.

``The most essential task now for Chinese companies is to survive, instead of thinking about overseas acquisitions,'' said Li Rongrong, director of the State-Owned Assets Supervision and Administration Commission, which holds the government's stakes in companies. ``The major difficulty faced by state companies is a significant decline in market demand.'' .....(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aE1MbrZTRk.Y&refer=home