China Predicts Slowing of World Economy

Problems in the U.S. mortgage market may dampen American consumer spending, People's Bank of China Gov. Zhou Xiaochuan said during a visit to Johannesburg, according to the Xinhua News Agency.

"The world economic growth may experience a slowdown next year, but it is likely to have only mild effect on China's growth," Xinhua said, citing a Wednesday interview with Zhou. It said he was in South Africa for a conference on global financial stability.

China's rapid economic growth, expected to top 11 percent this year, has been driven by exports, but Beijing is trying to reduce reliance on foreign markets by encouraging its own consumers to spend more.

Zhou said "developments in the next two months are to be closely watched, as U.S. consumers enter their annual spending frenzy before Christmas," Xinhua reported.

Even if exports to the United States suffer, Zhou said "that can somewhat sort out the imbalances in bilateral trade, and is likely to have only mild effect on China's economic growth," according to the report.

Zhou recommended Chinese exporters explore other markets rather than focusing on the United States, Xinhua said.