Asia safe from Europe's woes, says Fitch Print article Send a Tip from AFP 14 May 2012 post a comment Asian economies are better shielded from Europe's financial woes than other regions and China is unlikely to undergo a "hard landing" despite recent gloomy data, credit watchdog Fitch said Monday. In a media telephone conference, the US-based firm's head of Asia-Pacific sovereigns Andrew Colquhoun said Asia's limited exposure to European banks would buffer it against financial disruption in the debt-stricken continent. "Asian economies are more dependent on foreign households and consumers buying Asia's exports than they are dependent on foreign banks providing funding," he said. "Thinking about whether developments in Europe constrain or in any way cap sovereign ratings in Asia, I can be clear that the answer is no," Colquhoun added. Colquhoun said he was less concerned with China's near-term economic outlook than other commentators despite a slew of data last week indicating a weakening in Asia's largest economy. China on Saturday announced it would cut the amount of cash banks must keep in reserve after its industrial production growth slumped to a three-year low in April, while trade figures for the month also stagnated. The country's economy grew an annual 8.1 percent in the first quarter of 2012, its slowest pace in nearly three years, raising fears of a sharp slowdown. "Fitch expects eight percent GDP growth in 2012... We have not revised that forecast, it was already a somewhat below-consensus forecast and the recent data appeared to be in line with our estimates," Colquhoun said. "I think that China is experiencing a policy-led slowdown in growth which was implemented by the authorities in response to the inflation pressure that emerged last year, and it seems to me well within the parameters of normal policy management," he added. Colquhoun said he expected Chinese authorities to be "broadly comfortable with the rate of growth of around eight percent so long as we don't see any adverse impact on the labour market. "I don't expect China to hit a hard landing... I think the authorities will be happy to see growth slow somewhat to take the steam out of inflation," he added. China on Friday said its consumer price index, the main gauge of inflation, rose 3.4 percent year on year in April, easing from 3.6 percent in March due to moderating food prices. Soaring prices have been a politically sensitive thorn in the Chinese government's side, with authorities targeting rates of within four percent this year to curb the potential for social unrest. Following the bank reserve requirement cut, analysts widely expect the government to further loosen monetary policy as it looks to boost growth.