HONG KONG (AP) — Europe’s festering debt crisis is adding to strains on China just as the country is pricking its property bubble and facing a manufacturing downturn, limiting the ability of the world’s No. 2 economy to prop up global growth.
Leaders in Europe are navigating a crucial week as they work to find a breakthrough at a summit Friday to avoid the disintegration of the euro common currency and the global financial panic that could ensue.
Such a scenario would slam China by crimping economic growth through lower demand for its exports. It would also prompt Beijing to slow the rise of its currency to a crawl — exacerbating trade tensions with the U.S. and other nations that say China’s yuan is already too cheap.
Even if the euro common currency shared by 17 nations remains mostly intact, China and other Asian countries will still face the daunting prospect of a recession in Europe next year and anemic growth in the U.S. — both crucial markets for the region’s cars, electronics, textiles and other exports.
During the 2009 global recession, China’s ‘shock and awe’ style stimulus kept its booming economy on track. For Asia and other
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