HONG KONG, July 18 — Most Asian markets sank today as further weakness in China’s economy fuelled worries about the effects on global growth, overshadowing optimism that the United States is winning its battle against inflation and could avoid a recession.
The figures came after last week’s reports showing inflation had flatlined, suggesting China was on the brink of a period of painful deflation, while exports plunged for a second straight month. Hong Kong led losses Tuesday, shedding more than two per cent following a five-day rally, as it reopened a day after being shut because of a severe storm.
They said there was a possibility that the central bank would cut interest rates again and lower the amount of cash lenders must keep in reserve, allowing them to provide more loans. “Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia, and slow growth in China can have some negative spillovers for the United States,” she said in a Bloomberg Television interview.