China'S Economy Sneezes And Chills Around Countries

China has cut interest rates for the five time since last November, and has taken numerous measures to promote banks' lending efforts.

The Chinese government also provided tax relief measures for enterprises, and accelerated the approval process of infrastructure projects.

Premier Li Keqiang chaired a State Council executive meeting on Tuesday to adjust and improve the capital ratio system of fixed assets investment projects, which reduced the minimum capital requirement ratio of fixed assets investment projects in port, coastal and inland shipping, airports and other fields related to the national economy and the people's livelihood, from 30% to 25%, and railway, highway and urban rail pit projects dropped from 25% to 20%.

The sharp drop in export data released by South Korea on Tuesday is alarming, revealing that the impact of China's economic slowdown is spreading across the Asia Pacific region.

Data showed that Korea's exports fell 14.7% in August, the biggest decline since August 2009, partly due to the weak demand of China's largest trading partner.

This is the first statistical data reflecting the shrinking regional trade since the devaluation of Beijing in August 11th.

The devaluation of the renminbi has also triggered huge earthquakes in financial markets and concerns about China's economic slowdown, although the Chinese government is taking measures to boost the economy.

China's manufacturing sector is still slowing sharply.

China's official manufacturing PMI 49.7 for the first time in August has fallen below the 50 decline for the first time in six months, a record low since August 2012.

In August, the final value of PMI of Caixin manufacturing industry showed that the operation of China's manufacturing industry appeared the most obvious slowdown since March 2009.

Fan Limin, an economist at HSBC, said (Frederic Neumann)

The deceleration and the consequent decline in global commodity prices are having a profound impact.

IMF president Lagarde said on Tuesday that the health of China's economy may drag down further global economic growth.

Resource rich Australia is the first to bear the brunt of the weakening demand in China.

Data released in Australia this morning showed that GDP grew by 2% in the two quarter, a new low in March 2011.

In terms of business, a sign of stress is that a large copper, gold and uranium mine in Australia's mining giant BHP Billiton has laid off hundreds of workers this year.

Japan is also hard to escape. The second quarter of the economy has shrunk.

Japanese companies are struggling to cope with falling demand from China, and there is growing concern that Japan's economy will shrink again in the third quarter.

Japanese government agencies that track the trade situation say Japan's exports to China fell by 10.8% in the first half of this year, and exports are expected to slacken in the second half of the year, mainly due to the slowdown in exports of smart phone production equipment.

Two other Asian economies, Malaysia and Vietnam, announced on Tuesday that the manufacturing sector slipped in August.

The move of the central bank to guide the depreciation of the renminbi has made Chinese goods cheap, creating a new competitive barrier to these countries.

In August, the export volume recorded US $39 billion 330 million, which declined for eighth consecutive months, of which exports to China fell by 8.8%.

South Korea's exports to China account for 1/4 of its total exports.

South Korea's exports to the euro area continued to slack, down 20.8%.

In addition to mobile phones and computer chips, South Korea's exports to almost all export destinations including China, including automobiles, petrochemicals, ships, steel, machinery and other commodities have declined.

Exports account for about half of Korea's total output value.

HSBC Fan Limin said that South Korea was not only directly affected by China's weak domestic demand, but also affected by the deterioration of the global commodity market.

China's policymakers have vowed to ensure a 7% economy this year.

This will continue to be the lowest growth rate in more than 20 years.

According to the announcement issued by the Chinese government on Saturday, Prime Minister Li Keqiang said the Chinese economy showed signs of improvement after the government adopted a series of measures to promote growth.

He also said it is necessary to take more measures to ensure the completion of this year's main goals and objectives of economic and social development.