China heads for big trouble as exports are hit by euro crisis

As China's biggest trading partner, the fallout from Europe's ongoing debt crisis is threatening to drag down China's export-driven economy.

Over the past few years, China's domestic stockmarket has been "a pretty reliable guidepost" to the economy. And "much better than the dubious official guidance", says Alan Abelson in Barron's. It's not in a bullish mood, having lost around 20% this year.

Expectations are being scaled down. "Most China observers were not talking about any kind of landing three months ago," says James Chanos of fund manager Kynikos. "Now they are confidently talking about a soft landing." But fear of a hard landing a sharp slowdown or a crash is becoming more widespread.

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