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China worries ahead of ECB meeting

Monday, March 07, 2016 - 01:40

China's been reassuring the world it can handle a slowdown in its economy but doubts remain. As Sonia Legg reports, the worry about the slowdown is causing almost as much harm as the slowdown itself.

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There've been plenty of new warnings from China in recent days - the first from the country's top economic planner. (SOUNDBITE) (Mandarin) HEAD OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION, XU SHAOSHI, SAYING: "At the moment the speed of our economy is slowing, the price of industrial goods is falling, and so are the profits of private enterprises and fiscal revenues." The finance minister was next up with a growth warning, although he stressed there was scope to increase debt to cushion the fall. It was enough to keep Chinese shares up but not Europe's A survey of euro zone sentiment didn't help - it deteriorated for a third month - hitting its lowest level for a year. It seems everyone is worried - even Germany. Mittlestand businesses - the largely-family run firms that form the backbone of the economy - are postponing investments because their buyers are nervous. BGC's Mike Ingram SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "Small companies everywhere be they in Germany, France or even the UK tend to suffer more from market uncertainty, policy uncertainty and economic uncertainty because they don't have the resources to build in any contingencies." It all makes the ECB's job this week that bit harder. Investors have a long wish list but they're not getting their hopes up ahead of Thursday's meeting. SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "December was an absolute disaster that explains why market participants aren't quite as short of the euro going into this week's meeting as they were three months ago." Mario Draghi has already promised policy easy. But the devil will be in the detail.

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China worries ahead of ECB meeting

Monday, March 07, 2016 - 01:40