China Brakes, World Slows

Here's a trend few investors would have predicted even a few short years ago: China just thinks about slowing its torrid economic growth, and the world's financial markets go into a tailspin.

Case in point: On April 28, Chinese banks reported they would go on a three-day lending moratorium on government orders. The same day, Reuters ran an interview with the premier of China, who promised very strong action to rein in excessive growth. In the U.S., shares of companies selling iron ore, aluminum, nickel and copper to China tanked on fears that the Chinese were about to stop buying the raw materials that fuel their economy.

The damage didn't stop there. The next day, shares of shipping companies sank on fears that a cooling Chinese economy would have less need for the services of oil tankers, container ships and bulk freighters. ...