Investors hammered Chinese assets and those of developing nations relying on its sustained growth a day after US President Joe Biden described the country’s economic woes as a “ticking time bomb.”

Chinese technology stocks traded in Hong Kong capped their worst week since June 23, with Friday’s selloff spilling over to equity markets in South Africa and Philippines, which derive a fifth of their export revenues from the world’s second-biggest economy. Both stock and currency benchmarks for the wider emerging world headed for a second week of losses.

Underlying the rapid deterioration of sentiment this week on China was not only worsening data — deflation, trade contraction and slowing credit — but also signs of financial distress. Concern is growing about cracks beginning to show in a $9 trillion debt market to fund local government spending, while what was until recently the country’s largest property developer by sales became a penny stock after missing debt payments.

On top of everything, regulatory risk has returned, as the country acts to revamp its rules for overseeing hedge funds.

Sentiment was kinder toward emerging markets less directly exposed to China’s travails as investors responded to Thursday’s tame US core-inflation report.

Sovereign dollar bonds were heading for a weekly advance, with Pakistan leading the rally as Saudi Arabia’s investment in its mining projects boosted sentiment. Ecuador bonds defied a political assassination as investors bet on its fundamentals. Ghana and Sri Lanka were rewarded for progress with debt restructuring.

Ukraine is winning back investors’ favor in a big way as its economy performs better than expected, and the country’s resilience surprises observers.

Seven of the best performers in a Bloomberg gauge of dollar bonds on Friday were issued by the war-torn country. Egyptian debt was booming too, despite record inflation and a negative credit-rating review in progress.

Booming tourism is the latest theme emerging-market investors are latching on to. Greece saw an influx of holiday makers despite fire tragedies and Turkey achieved a rare current-account surplus helped by summer visitors. The best-performing stock on the MSCI stocks index this week is a Korean hotel that also operates a duty-free chain.

Events to watch later on Friday include the release of a measure of inflation in Brazil and Mexico’s industrial output. Traders will also be watching reaction to Peru’s decision to hold interest rates when markets open in the Americas. 

This article was provided by Bloomberg News.