I guess the old adage still applies: “If the US economy sneezes the world catches cold” except, right now, we have a cold.

China, who relies heavily on exports to the United States, is having a tough time pulling itself out of a recession:

“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong today. “The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”

An index tracking Chinese stocks traded in Hong Kong dropped 1.8 percent today, the most in two weeks, after the central bank raised reserve requirements for the third time this year. The Shanghai Composite has slumped 12 percent this year, Asia’s worst performer, as policy makers seek to rein in a lending boom that’s spurred record gains in property prices. China’s markets are shut for a holiday today.

Copper touched a seven-week low and BHP Billiton Ltd., the world’s biggest mining company, fell the most since February on concern spending in the world’s third-largest economy will slow and after Australia boosted taxes on commodities producers. Rio Tinto Ltd., the third-largest, slid as much as 6 percent.

As I pointed out on the excellent web site The Resistance (you should check it out) the Chinese government is trying to prop up its economy through a ‘New Deal’ style government works project and that effort is only prolonging China’s slide in to recession.

via China May ‘Crash’ in Next 9 to 12 Months, Faber Says (Update3) – Bloomberg.com.