New Zealand, S Korea cut rates to counter slowing China

New Zealand and South Korea cut interest rates on Thursday to counter the effects of sluggish global demand, and in particular subdued exports to China, their largest export market.

An outbreak of a deadly respiratory virus, Middle East Respiratory Syndrome, was another factor that prodded the Bank of Korea into its fourth easing in less than a year as anxiety over a spate of deaths has hit demand in the South Korean economy.

Worries aired on Thursday by central bankers in both New Zealand and South Korea over China's slowdown, however, reflected concerns held in all 120 countries worldwide that count China as their largest trading partner.

Fixed asset investment in China grew at its slowest rate in over 14 years last month, according to data that suggested the slowdown had longer to run in the world's second largest economy.

"Investment is vital for stabilising growth in the short term and the poor performance of investment is putting pressure on the economy," said Li Huiyong, an economist at Shenyin & Wanguo in Shanghai.

In other data released on Thursday, industrial output and retail sales growth at least showed signs of steadying, and were largely as expected. Cutting interest rates for the first time in four years, the Reserve Bank of New Zealand flagged several risks to China's growth, including doubts about the steps taken by Beijing so far to boost growth.