China growth may slow at the worst time

--China is starting to gain control ofits turbocharged economy, just as a U.S. slowdown raises therisks of doing so. --A narrowing trade surplus and declining money-supply growth are among the first signs that the world's fourth-largesteconomy is pulling back from its fastest expansion in 13 years.The government has raised interest rates six times in a year,restricted credit, frozen some prices and let the currencyappreciate to damp growth and inflation. --The risk is that, with months of effort to cool off Chinafinally taking hold when the U.S. is already flirting withrecession, both main engines driving the global economy may power down at the same time. --China is still on a tear. Its economy expanded 11.5 percent last year, according to a government estimate, and it contributed 17 percent to global growth, the same as the U.S. With prices rising at the fastest pace in 11 years, the rulingPolitburo and the central bank are trying to engineer a coolingof growth that doesn't also throw millions of China's 1.3billion people out of work. --The two economies are closely linked. The U.S. buysabout 19 percent of China's exports. A cooling U.S. economycould magnify the impact of China's anti-inflation measures,says Qu Hongbin, chief China economist at HSBC Holdings Plc inHong Kong. ``A U.S. recession would cause a major disruption to theChinese economy,'' says Qu. ``Aggressive tightening could proveoverkill.'' -- A 1 percentage point slowdown in the U.S. would trimChina's export growth by 4 percentage points and reduce GDP by0.5 percentage point, according to Ma Jun, chief China economistat Deutsche Bank AG in Hong Kong. Exports rose 21.7 percent inDecember to $114.4 billion.