Make us your home page
Instagram

China's economic slowdown emerges as risk to U.S. economy

HONG KONG — Concerns are growing about China's economy as the country's new leadership tries to get a handle on deep problems that experts say have been years in the making.

There was a record spike Thursday in the rates that banks charge when they lend to one another, evoking memories of the credit shortage that shook the U.S. economy during the financial crisis. A disappointing figure from the manufacturing sector provided another ominous sign this week.

For years, China has been viewed as a place flush with money, erecting gleaming airports, highways and entire cities seemingly overnight. But experts say that much of that building — and impressive economic growth — was fueled by debt that local governments are now struggling to repay, especially as the economy slows down.

"You're dependent on creating new debt every day," said Anne Stevenson-Yang, co-founder of J Capital Research, a Beijing-based analysis firm.

U.S. economists and investors are closely watching events in China, the world's second-largest economy, because of the close ties between the countries. This week, the rate spike and manufacturing slowdown contributed to volatility in U.S. stock markets. Rates in China eased off their record Friday.

China's leaders have acknowledged problems with its financial system, and President Xi Jinping has vowed to reform the country's economy.

"We believe the new leaders are fully aware of the financial risks in the economy," wrote Zhiwei Zhang and Wendy Chen, economists at Nomura, an investment bank.

China's economic slowdown emerges as risk to U.S. economy 06/21/13 [Last modified: Friday, June 21, 2013 10:10pm]
Photo reprints | Article reprints

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Ousted to political Siberia by Corcoran, Kathleen Peters sets sights on Pinellas Commission

    State Roundup

    TALLAHASSEE — The perks of power in Tallahassee are a coveted chairmanship, a Capitol office in a prime location and a prominent seat on the House floor. Now Rep. Kathleen Peters has lost all three, but here's the twist: Her trip to "Siberia" might actually help her reach the next step on the Tampa Bay political …

    Rep. Kathleen Peters, R-South Pasadena, has been relegated to the back row in the State House chamber, moved to a fouth floor office and stripped of her job as chairwoman of a House subcommittee after a series of disagreements with House Speaker Richard Corcoran. [SCOTT KEELER | Tampa Bay Times]
  2. UPS relocates express operations from St. Pete-Clearwater to TIA

    Airlines

    TAMPA — United Parcel Service Inc. is switching airports for its express air operations. Beginning in October, UPS will relocate from St. Pete-Clearwater International Airport to Tampa International Airport.

    Beginning in October, UPS will move from St. Pete-Clearwater International Airport to Tampa International Airport. [Associated Press file photo]

  3. Richard Corcoran takes aim at public financing of campaigns

    State Roundup

    TALLAHASSEE — House Speaker Richard Corcoran, R-Land O'Lakes, may not be running for governor — not yet anyway — but his latest idea will get the attention of those who are.

    House Speaker Richard Corcoran wants the Constitu?tion Revision Commis?sion to ask voters to repeal the state’s system of partial financing of statewide elections.
  4. Related Group breaks ground on complex at old Tampa Tribune site

    Real Estate

    TAMPA — When Miami developer Jorge Perez first eyed a 4.2-acre tract on the west bank of the Hillsborough River two years ago, people asked him if he wouldn't prefer to build on the opposite side closer to the downtown core.

    No way.

    From left, Related Group executive associate Arturo Penaa, Jorge Perez, center, founder and CEO of the Related Group, Mayor Bob Buckhorn and Steve Patterson, the President of Related Development dig their shovels  during the groundbreaking ceremony of the 400 unit Riverwalk Manor apartment complex on site of the old Tampa Tribune building on Wednesday. [OCTAVIO JONES | Times]
  5. Eat 3-course meals for $35 at these 100 restaurants for Orlando's Magical Dining Month

    Food & Dining

    In the early 1900s, hotels offered "table d'hote" or "prix fixe" menus as a form of loss leader. Hotels didn't necessarily make money on these lower-priced, multi-course meals, often served at communal tables, but they made up for it on the booze. Prohibition may have contributed to a gradual shift toward a la carte …

    Bulla Gastrobar serves a variety of Spanish and Portuguese dishes.