New year, new worries about Chinese growth. The services PMI number is down sharply on the month sending Asian shares skidding by about 2%. Bill O'Neill from UBS Wealth Management says China is certainly a risk, but he thinks the government will do enough to keep the cap on credit growth.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (JANUARY 6, 2013)

1. UBS WEALTH MANAGEMENT, CIO WEALTH MANAGEMENT, BILL O'NEILL, SAYING:

JOURNALIST ASKING BILL O'NEILL: 'Bill, how worried are you about these numbers specifically on the back of the manufacturing numbers? Let's throw in the debt there as well, the need for structural reform. Is China the big worry this year?'

BILL O'NEILL: 'Well, China is certainly a risk, Axel, and it has been in the forefront of investors' minds in the second half of the year particularly given the performance late last year on the emerging market side. But we are looking for a growth moderation. We should emphasize that, particularly in the fourth quarter down to 7.6% from 7.8%. But we do think that the government will do enough to keep the cap on credit growth particularly and growth is moderating. I think this suggests, these numbers suggest it'll moderate possibly through into the first quarter. But we're still looking at something over 7.6%, maybe up to 7.8% growth next year in China. But risks are somewhat to the downside. But there has been good news, I mean, house price inflation has moderated. We think the numbers, the big picture numbers and local government debt are probably somewhat exaggerated. The key concern about local government debt is the speed of its accumulation and also the fact, the concentration of the debt, of general government debt in the local government sector itself. But I think clearly, you know, the market is going to have this at the forefront in most of the first half of 2014. But we're not expecting a catastrophic decline or deceleration of growth. The worries are that the spikes in interbank rates that we've seen, the tightening and liquidity we've seen, do actually have an impact on sentiment, more significant than many imagine.'

JOURNALIST: 'Will those worries keep a cap on equity gains in Asia?'

BILL O'NEILL: 'I think it's going to continue to cloud the picture for emerging markets. It's one of the reasons why we were cautious going into the first half of the year. It's going to clearly affect the story in commodities. We've seen weakness in commodities again outside the precious metal sector in the first days of the year. And I think generally, it does cast a cloud over the Asian sector. Again, those markets we think they'll perform best. They're the ones that are reforming whether it's a valuation argument, and particularly those that are actually exposed to an American, U.S. revival. Weakness of the Yen was a big theme of course last year. It continues to be a big theme at the beginning of this year. How long is that going to go on? I think it's going to continue I think up to and including the debate over when the Bank of Japan actually responds to the possible impact of the consumption tax hike. You could see a further weakening of the Yen. I think clearly we would expect a further weakening of the Yen in the run up to that, possibly a delay in the Bank of Japan's response to the potential risks around the consumption tax hike. We are still looking at playing this story in Japan in the first half through a weaker Yen rather than actually as a key preference for Japan within our equity portfolio.'