NEW YORK (AP) -- There's no reason for panic. Worry, yes, but not panic.
That was the opinion of some U.S. investment strategists after another free-fall on China's main stock market reverberated around the globe Thursday and sent the Dow Jones average to a loss of nearly 400 points.
Stock prices in China fell so fast that for the second time in four days, circuit-breaker mechanisms kicked in and halted trading, this time after just 30 minutes.
China's tumbling stock prices are, in themselves, nothing for investors outside the country to panic over. Because of government regulations, very few foreigners even own stocks on the Chinese markets that seized up.
But the selling was prompted by a surprise currency devaluation by the Chinese government and by worries about a slowdown in the country's manufacturing and service sectors. Because China is the second-largest economy in the world, those problems could spell trouble around the globe.
``This is not a situation that should result in panic; it should result in caution,'' said Kristina Hooper, head of investment strategies for the U.S. at Allianz Global Investors.
Even though China's economy is still growing at a rate that would be the envy of advanced economies, it's only about two-thirds of what it was five years ago and is expected to slow further.
A slowdown in China is seen as a threat by many investors because the country has been the main engine of global economic growth for years, particularly during the depths of the Great Recession.
U.S. and European companies have rushed to sell cars and a multitude of other products to China's fast-growing middle class. China accounted for more than half of Apple's revenue growth in the fiscal year that ended in September. (Apple stock fell more than 4 percent Thursday.)
Also, the communist state's huge manufacturing sector is a major buyer of machinery and basic materials such as copper and oil, often from countries such as Brazil and Russia.
As a result, slow growth in China could hurt profits at corporations all over the world.
For companies looking to export to China, the devaluation of the yuan is also bad news: It makes their products more expensive when brought ashore, putting them at a competitive disadvantage.
China says its economy is growing at close to 7 percent, but many investors don't trust the government's numbers and believe that figure is inflated. Some mutual fund managers say the actual rate could be closer to 4 percent.
``Chinese growth is clearly slowing, but it is not plummeting,'' said Ben Mandel, a strategist with JPMorgan Funds.
The slowdown has already hit corporate profits. American heavy-equipment maker Caterpillar is seeing sales weakening not only in China but also in Brazil and other countries that dig out the commodities China used to be so hungry for.
Still, Japan and Europe do a lot more business in China than the U.S. does, and as a result, they face higher risks.
``It will not translate into a mortal threat to U.S. economic growth,'' Mandel said. ``When we talk developed markets, Japan is the most heavily exposed to China, with Europe being in the middle, and last is the U.S.''
That's one reason European and Japanese stock indexes have fallen even more than U.S. markets this week. China is a key market for German's BMW and Mercedes Benz, for example, and Germany's DAX index is down 7.1 percent this week. Japan's Nikkei 225 index is down 6.7 percent.
After the market closed Thursday, Chinese regulators removed the recently installed circuit breakers, hoping that will allow markets to find their level.
But that may mean even more volatility in a year that has already had a lot.