China´s exports may be influenced by the European sovereign debt crisis, as it spreads to five south European countries including Spain and Hungary. The five countries´ economies stand up one third of the euro zone economy.

IMF warns of half-hearted budget cuts
The International monetary Fund says delayed or half-hearted budget cuts by vulnerable eurozone countries could trigger a further loss of market confidence in the region, as well as a new slide in the 16-nation currency.

In Monday's report on the eurozone economy, the IMF also called for indebted nations facing high borrowing costs to push through austerity programs to curb mounting debt. Meanwhile, the euro has slumped to a new four-year low as investors fear European governments might not be able to repay loans while economic growth remains weak.

UK PM: Drastic steps needed on budget
In the meantime, British Prime Minister David Cameron campaigned on repairing the UK's economy. Now, after less than a month in power, he says the scale of the country's budget problems is even worse than first thought. Cameron says drastic steps are needed to address a budget deficit of 226 billion US dollars, or 11 percent of GDP.

He said, "Now, let me be clear. Our debts are not as bad as Greece's. Our underlying economic position is much stronger than Greece's. And crucially we have a government that has already demonstrated its willingness and its ability to deal with the problem. But Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can somehow be avoided."