China’s Stocks Drop to Lowest Since March 2009; Smallcaps Tumble

China’s stocks fell to the lowest level since March 2009 on concern the European debt crisis will curb exports and a potential cash crunch before the Chinese new year holidays may boost lending costs for small companies.

China Cosco Holdings Co., Asia’s largest shipping line, dropped 4.4 percent after Luxembourg’s prime minister said the European Union is facing a recession of unknown scope. Ufida Software Co. plunged 8 percent, leading declines for technology stocks, the worst performing industry. Shanghai Pudong Development Bank Co. paced gains for lenders after the central bank refrained from selling three-month bills and investors speculated the central bank will cut lenders’ reserve requirements this month.