Prime Minister John Key says China is a much more significant issue for New Zealand  than the Greek financial crisis.

His comments come as the Chinese Central Bank is pumping money into the stock market and putting a hold on Initial Public Offerings (IPOs).

Reuters reported that the government, regulators and financial institutions were now waging a concerted campaign to prop up the nation’s stock markets, amid fears that a meltdown would rock the financial system and inflict heavy losses across an economy where annual growth is already running at a 24-year low.

Almost $US3 trillion in market value – more than the entire economic output of Brazil – has been wiped out since markets went into reverse just a few weeks ago, posing a bigger headache for many global investors than even the Greek debt crisis.

The main Shanghai Composite Index has lost nearly a third of its value since mid-June, a dramatic end to an equally breath-taking rally that saw it more than double in just seven months, fuelled by official interest-rate cuts.

The sell-off is especially worrying because the bull market had been built on a mountain of speculative loans. Some analysts suggest total margin lending, both formal and informal, could add up to around 4 trillion yuan ($US645 billion).

Mr Key said that China was a far more influential player than Greece.

“It’s a big driver of global growth,” he said.

“Greece is a sentiment story.”

He said he wasn’t terribly worried about China “but obviously when we look into the crystal ball and say what factors should be worrying about” then Australia and China were the two that concerned New Zealand the most because they so influential on the New Zealand economy.

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At his weekly post Cabinet Press Conference the Prime Minister faced persistent questioning about the continuing drop in dairy prices and how much this might impact the economy.

“I am not at all panicked about what I see in the economy at the moment,” he said.

“I accept that there are a few headwinds that weren’t so prevalent a little while ago.

“I really urge people to take a deep breath and yes, dairy prices are down a little bit but there are a lot of other factors in our economy.

He listed tourism, red meat, kiwifruit, win and construction activity in Auckland as all being areas which were currently buoyant.

He also hinted that fiscal surplus/deficit figures for the 11 month to May to be released on Wednesday might continue to show a small surplus.

“I think you’ll see they are reflecting quite a strong set of accounts,” he said.

But the problem for the Government is that the accounts are historical and with the continuing slowdown in the dairy industry there is a chance that the hoped for surplus next year will be missed by a much bigger margin.

That situation could be exacerbated if the Chinese economy slows more than it is now.

Reuters says that weighed down by a property downturn, factory overcapacity and high levels of local government debt, Chinese economic growth had already been expected to slow to around 7 percent in 2015, robust by global standards but its weakest annual expansion in a quarter of a century.

These are nervous times in Wellington — but the focus is China, not Europe.