Concerns that China’s rapid growth could lead to inflation have prompted the People’s Bank of China to tighten credit in the country. Back-to-back yield increases on bank bills and a recent increase in bank deposit amounts have investors worrying that credit tightening within China will slow down the rate of recovery in Asia.
Ã¢â‚¬Å“China tightened policy sooner than people were thinking, so that spooked the market,Ã¢â‚¬Â said Nicholas Field, who helps manage about $11 billion in emerging-market stocks at Schroders Plc in London. Ã¢â‚¬Å“We have now passed that sweet spot where economies are starting to recover and there is a great earnings boost from the low point. This is not a collapse or a crash, but we will get a correction.Ã¢â‚¬Â
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