'Everything is made in China nowdays' seems to sum it up.
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FT.COM
Shares plummet on fears of global slowdown

By Christopher Brown-Humes in London, Geoff Dyer in Shanghai and  
Michael Mackenzie in New York
Published: February 27 2007 09:24 | Last updated: February 27 2007 21:10

US stocks suffered their steepest drop since markets reopened  
following the September 11 attacks in 2001, after the biggest fall in  
Chinese shares for a decade and slides in other global stock markets  
triggered a sharp rise in risk aversion.

The Dow Jones Industrial Average was down more than 500 points at one  
stage on Tuesday afternoon as concerns over Iran, worries about the  
US subprime mortgage market and a warning from Alan Greenspan, former  
chairman of the Federal Reserve, about a possible US recession  
punctured recent market optimism. There was a sell-off in higher risk  
credit markets and a rising yen signalled the beginnings of an  
unwinding of the global carry trade, where investors borrow in  
currencies with low interest rates to buy higher-yielding assets  
elsewhere.

Mainland Chinese shares fell nearly 9 per cent amid fears that the  
authorities were planning a crackdown to cool the market’s  
exuberance. Traders said it was highly unusual for events in Chinese  
markets to have a global impact, but saw it as a sign of China’s  
increasing influence on the global economy.

“This goes to show that everything is made in China these days,” said  
Tim Bond at Barclays Capital, the investment bank.

The FTSE Eurofirst 300 index dropped 2.86 per cent – its biggest  
daily fall for four years – while the FTSE 100 index fell 2.31 per  
cent, its largest fall since June.

On Wall Street, the Dow Jones Industrial Average was 3.2 per cent, or  
400 points, lower in late afternoon trade, after the New York Stock  
Exchange had introduced trading curbs – the first time computer  
trading had been limited since July. The S&P 500 index was also down  
3.2 per cent.

Leading emerging markets were among the hardest hit, with Turkish  
shares falling 4.5 per cent, Russia’s RTS index down 3.3 per cent and  
Brazil’s Bovespa index off 6.6 per cent.

“Markets that have risen faster than others will face a sharper  
decline as hedge funds reduce their exposure,” said Mary Ann Bartels,  
chief US market analyst at Merrill Lynch.

The global sell-off was aggravated by a weaker-than-expected 7.8 per  
cent fall in US durable goods orders in January, although that was  
partly offset by more positive news on consumer confidence and  
housing. There was a flight to safety in bond markets, with yields on  
10-year US Treasuries falling 13 basis points to 4.499 per cent.  
European junk-rated credit saw one of the biggest one-day rises in  
the cost of protection for such debt that the derivatives markets  
have seen.

The Japanese yen and the Swiss franc – the main funding currencies  
for the global carry trade – made strong gains.

Bob Parker, deputy chairman of Credit Suisse Asset Management, said:  
“This is going to be more than just a one-day event and could go on  
for a few weeks. But it’s not the start of a one-year bear market  
trend.”

Simon Hayley, senior international economist at Capital Economics,  
said: “If today’s global sell-off tells us anything, it is that  
sentiment in developed markets is fragile.”