Forex Focus: A go-slow in the Chinese engine room "While these figures are not disastrous, it once again calls into question what the Chinese authorities can do to stimulate things while keeping inflation under wraps," added Cook. Investment projects are being mooted, but how many airports does one country need? This continues our belief that the Chinese economy has managed to engineer a soft landing from the issues it faced last year, but has not been able to leave the runway again. Daniel Abrahams of MyCurrencyTransfer.com thinks any weakness will be short-lived. Write off the the Middle Kingdom at your peril. Boasting the second largest economy in the world and a restructuring in full swing, which includes sign off on £94 billion worth of infrastructure projects, this expansion of credit will see growth pick up," he said. Josh Ferry Woodard of TorFX, said: "There is a solid case for growth rebounding strongly later on in the year. Chinese banks issued a staggering £112 billion of new loans during March - twice as much as during February - and, as this influx of credit starts to circulate through the Chinese dragon's bloodstream, sturdy economic growth should follow. However, over the next decade it will be interesting to see how China copes with the amount of bad loans on the books of its regional governments. Charles Murray of FC Exchange added: "The recent run of disappointing data could be short lived, as China has now realised it needs to focus more on domestic demand and not rely on exports to provide sustained growth. The implication for other currencies of a slowdown in China is easy to see. All the higher yielding currencies, such as the Aussie and Kiwi dollars and the South African rand, are likely to feel the effects and weaken off in the short term. Chris Towner of HiFX has long believed the Aussie currency is due a fall: "The Australian dollar remains deeply over-valued and given the weakening in the Chinese economy, metal prices dropping and the Australian economy starting to look vulnerable once again, we expect GBP/AUD to push back above 1.50 towards 1.60 in the months ahead," he said. But Simon Smith of FxPro thinks the Australian rate is not totally reliant on commodities: "Comparatively high interest rates, low sovereign debt and better growth rates all provide support," he said. The gold price has fallen on the back of the Chinese problems. "The dubious honour of Most Dramatic Tumble of the Week went to gold - which experienced its biggest two-day fall in 33 years," noted David Kerns of Moneycorp. Its primary appeal as the classic hedge against inflation has dimmed as global inflation continues to be weak in the face of poor growth and falling oil prices. As a result, equity markets are performing well, while gold may be entering its first bear run in a long time.