China won't play saviour to world again

To the long list of current global economic woes, including sluggish growth and continued high unemployment in the US, the debt crisis in the euro zone, instability in the oil-producing Middle East could be added another - China.

This week's selling frenzy in markets across the world was at least partly sparked by fears that China's huge economy might cool off. The Chinese government had been working on a managed slowdown this year over worries about steadily rising inflation and an overheated property market.

Analysts now say the question would be whether the slowdown could be calibrated enough for a "soft landing," or whether a more severe slump - a so-called "hard landing" lay ahead.

The answer does not concern China alone. According to analysts, when recession hit the world economy in 2008, Chinese officials came out with a massive 4 trillion renminbi ($586 billion) stimulus package that spurred a boom in real estate, construction and car sales which made China a lifeline for some American companies like General Motors, which was able to recover fast from its 2009 bankruptcy on the soaring demand for cars in China.

However, the Chinese government is now in no mood to oblige the world with a repeat performance and is withdrawing from stimulus spending It has tightened bank lending to soak up excess liquidity. Also, Chinese officials had repeatedly said there would be no new stimulus.

What this means is that if the world was looking to China to help bolster the struggling global economy China would ask the world to look elsewhere.