China Suprise Increase in Interest Rates May Mean Tough Times for Other Economic markets

The People's Bank of China has announced that they will increase their rates on loans and deposits by .25%. Economists believe that this increase in interest rates is the result of a precevied inflation which will curb the loan activity from other countries, namely the United States. The Chinese economy is growing at a fast rate of 10.3% with inflation also increasing well above 3%. The global market has been very pessimistic towards this economic reform because the Chinese domestic market increasing growth will effect the major economies of the United States, Japan, and the European Union. Also this unexpected change has mispreceived the world market which is very transparaent, while China's economy acts more compact with their information. The impact of this action may see the the exchange rate of major currencies such as the U.S. dollar, the euro the Japanese yen all become weaker against the Chinese yuan. Economist believe that this may effect assets and capital in other major economies. Some believe that this may lead to a decline in investment in the European and American markets. What do you think of this expansive Chinese economic reform? What do you think will be the effects on the American market? What do you believe are the implications from China over this?