Can China avoid a financial contagion?

(From South China Morning Post)

Economists at the Institute of International Finance (IIF) are paid to worry about glitches that disturb the flow of capital into emerging markets. They have fussed about faltering consumer confidence in the United States and the impact of the Iraqi conflict on the global economy. Now, they are stressed about the effect the atypical pneumonia outbreak may have on investments in China.

"It could be a bad thing in the short term," says Yusuke Horiguchi, deputy managing director and chief economist of the Washington-based institute, which speaks for the world's leading portfolio investors and lenders. "It's affecting the …