China’s economy slowing

China, the world’s fourth biggest economy, is in danger of a serious economic hangover as the pressure builds following two interest rates cuts just only last month in a bid to stir recession away from the east.

Central bank Governor Zhou Xiaochuan said that policymakers must take more action in order to stimulate consumption as exports are being hit harder than expected.

Government spending has been seen as the key to end the slump, however the GDP is still increasing and is currently running at a 9.7 percent increase from last year.

China has cut rates twice in the past month and eased controls on bank lending as a looming global recession threatens to slash demand for exports.

The economy as a whole though is actually growing at its slowest pace in over 4 years, and as a result, the Chinese cabinet is contemplating a variety of measures to stimulate the economy.

The manufacturing industry has taken a serious hit in recent months as a result of falling export orders and factory shutdowns due to fears of pollution during the Olympic Games in August.

The export slowdown has made its way to stocks as the CSI 300 Index is down 66 percent this year and the ailing property market is also stumping growth.

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