* China inflation, trade data show domestic slowdown
* UK sales tumble, Japan exports drop
* Focus on Nov. 15 summit, EU says trade deal within reach
* Japanese and European shares drop 3 pct, Wall St to slide
By Mike Peacock
LONDON, Nov 11 (Reuters) - Weak economic readings from China, Japan and Britain and a grim corporate outlook worldwide reinforced fears on Tuesday of a prolonged recession, prompting investors to look to a world leaders' summit for solutions.
Chinese import growth slowed in October and inflation fell to a 17-month low as domestic demand cooled, raising the likelihood Beijing will cut interest rates soon to back up the government's new economic stimulus plan.
In Japan, exports fell nearly 10 percent in the first 20 days of October, corporate bankruptcies jumped 13.4 percent year-on-year and sentiment in its service sector hit an all-time low, all signs the world's second biggest economy was teetering on the brink of recession.
German analyst and investor sentiment about the outlook for Europe's largest economy improved but remained gloomy with the nation probably already in recession.
The ZEW survey, which measures the ratio of optimists to pessimists, rose but still read -53.5, reflecting a large preponderance of the latter.
British retail sales fell by the biggest amount in more than three years last month, and a housing industry survey showed home sales slumped to their lowest level in at least 30 years.
"These are seriously poor numbers, especially in the run-up to Christmas," Stephen Robertson, director general of the British Retail Consortium, said of the sales data.
SUMMITRY
The worst financial crisis in 80 years, prompted by huge banking losses in the U.S. housing market, has now fostered a broad economic downturn, with even fast-growing China proving not to be immune.
Investors are looking to a summit of world leaders in Washington on Saturday for new solutions, following moves worldwide to cut interest rates, kickstart money markets and recapitalise banks, at a cost of more than $4 trillion.
"We need monetary and fiscal policy coordination across the world ... a broad, concerted economic response is now urgent," British Prime Minister Gordon Brown told a news conference. "The second priority is that we agree a timetable for measures that will clean up the failings in our banking system."
But officials are downplaying the likelihood of dramatic measures and aides to U.S. President-elect Barack Obama -- who world leaders have urged to make the credit crisis his number one priority -- said he would not attend the Nov. 15 summit.
Many in Europe want a root-and-branch reform of financial regulation but others have sounded more reluctant.
The EU's top trade official, however, said a growth-boosting deal on the Doha round of trade talks could be struck within weeks and the summit should fall fully behind it.
"It's very important that the G20 meeting in Washington on 15 November sends a clear signal to negotiators to achieve this objective," European Trade Commissioner Catherine Ashton said after meeting her U.S. counterpart Susan Schwab.
A European Commission statement quoted Schwab as saying world powers must seek "an ambitious and balanced Doha round that creates new trade flows and generates economic opportunities worldwide".
Brown said there could be no retreat into protectionism and that he was confident Obama shared that view.
On the home front, Obama is expected to spend hundreds of billions of dollars in a fiscal stimulus package, once he takes power in January.
Separately, the regulator for Fannie Mae and Freddie Mac, which guarantee nearly half of all U.S. residential mortgages, will announce on Tuesday new steps to mitigate home loan foreclosures, according to sources familiar with the plans.
CORPORATE PAIN
Inevitably, companies are not escaping unscathed.
Vodafone, the world's largest mobile phone company by revenues, cut its full-year revenue outlook for the second time in four months but said it would maintain profits by cutting 1 billion pounds ($1.58 billion) of costs.
Samsung Securities Co, South Korea's biggest brokerage, reported a 69 percent fall in quarterly net profit on the back of falling financial markets.
The world's largest hotelier, InterContinental Hotels, posted a 14 percent rise in third-quarter profits but said it saw a sharp deterioration in October market conditions.
Japan's Nikkei and European stocks shed 3 percent and U.S. stock futures pointed to a weak start on Wall Street in response to the worsening corporate outlook.
Monday's optimism, sparked by China's nearly $600 billion stimulus package, quickly evaporated.
"Worrying corporate news from the U.S. plus suggestions that the recession will be longer and deeper than previously thought are adding to the downside," Matt Buckland, dealer at CMC Markets, wrote in a note.
Deutsche Bank said the equity value of General Motors was now zero, sending its stock to a 62-year low, and analysts said Goldman Sachs could post its first quarterly loss.
U.S. electronics seller Circuit City filed for bankruptcy and coffee chain Starbucks' profits tumbled. (editing by Elizabeth Piper)