The results underline how important China is for global confidence as the country shifts from its traditional role as the world's factory floor to becoming a consumer-led economy. The Asian powerhouse, which has been the world's biggest consumer of raw materials, is now on course to post its slowest growth in nearly a quarter of a century. It grew 7.3 percent year-on-year during the July-September period, its slowest pace in more than five years, jeopardizing Beijing's 7.5 percent target for 2014.
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The slowdown comes after years of double-digit growth and at a time when the country's new leadership is stepping up regulation and trying to curb an overheated credit market. As well as the tougher stance by Beijing, there has been a more gentle touch from the People's Bank of China. The central bank looks increasingly ready to backstop the economy and manage the fall in growth after announcing a surprise rate cut last month.
Diana Choyleva, the head of macroeconomic research at Lombard Street Research, believes that growth and monetary conditions in China are actually much weaker than the official numbers suggest. She regularly concentrates her research on the country and said in a note last week that Beijing is battling an ongoing correction in investment and capital flight from its shores.
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"China's banks are one of the victims of Beijing's past excesses and will have to pay the price as the needed cleanup and financial market reforms unfold," she said.