China’s economy seems to be in trouble, which could be a very big problem for the world unless China’s leaders and trading partners ensure that economic strains in the world’s largest exporting nation do not lead to trade confrontations around the globe.

China’s housing bubble appears to be imploding, steel production is falling along with the demand for new construction and real estate developers are tottering, putting banks at risk. The Chinese government, which had been trying to curtail credit to slow the bubble’s rise, abruptly changed course last month, reducing the amount of money banks must keep in reserve at the central bank for the first time since 2008. On top of everything else, foreign demand for Chinese exports has slowed.

A hard landing in China would have an immediate impact from Brazil to Russia, whose exports of steel, lumber and other commodities fed China’s construction boom. And it will slow the world economy, which relies on China as one of the only remaining engines of growth.

But the bigger risk could be a trade war. Chinese leaders eager to hang on to power by showing continued economic growth may be tempted to pursue beggar-thy-neighbor strategies and subsidize exports in ways that would further destabilize a fragile world economy already buffeted by a crisis in Europe.