Asian Growth a Concern on China Slowing and Fed Plan

A slowdown in China and a pullback in liquidity from the U.S. will negatively impact growth in Asia as the region tries to cope without the boost provided by these two, says HSBC.

On Tuesday, the bank cut its gross domestic product (GDP) growth forecast for Asia ex-Japan from 7.2 percent to 6.1 percent for this year, while growth in 2014 was downgraded from 7.2 percent to 6.5 percent.

“After several years of roaring growth, fueled by cheap cash, central bankers in China and the U.S. sent a shiver through the region,” Frederic Neumann, co-head of Asian economics research at HSBC said in a note. “Rates in the U.S. are on their way up as prospects of tapering move closer. In China, the spike in money market rates, even if temporary, signals the determination by officials to at least skim the froth off the top.”


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