In These New Times

A new paradigm for a post-imperial world

China is a friend indeed for debt-ridden Europe

Posted by seumasach on October 30, 2011

The finest minds in Christendom continue to grapple with the question which baffles them all: if the euro is so weak why is it so strong? One reason is that, speculative attacks aside, the economic fundamentals of the Eurozone are stronger than those of the anglosphere. Another is that China and other emerging economies have a clear interest in supporting the Euro as an alternative to the dollar. Thus Europe benefits from the fact that, although similar regional integration projects are in formation elsewhere, only Europe has got as far as a common currency making it the only show in town outside the dollar.


30th October, 2011

BEIJING, Oct. 30 (Xinhua) — With the European Union (EU) grappling with its worst financial crisis since the eurozone was set up, China has unequivocally conveyed its readiness to enhance cooperation with the debt-ridden bloc in a “win-win” manner.

“China is willing to enhance cooperation with the EU and expand cooperation in the areas of trade, investment, technology and finance,” Chinese Foreign Ministry Spokeswoman Jiang Yu told a news briefing Thursday.

Her statement came after European leaders passed early Thursday a package of measures to alleviate the European sovereign debt crisis. Beijing welcomed the EU move and hoped it would be “conductive to bolstering market confidence.”

China’s active attitude was well received in European countries. “If the Chinese… decide to invest in the euro instead of the U.S. dollar, why refuse?” French President Nicolas Sarkozy said Thursday.

However, some Westerners failed to fully understand China’s good intention, asserting that the world’s second largest economy would take advantage of the European crisis for its own agenda. Some even went further to drum up trade protectionism.

Actually, a prosperous and stable Europe is important to China’s stability and development, as their economies are closely linked. The EU is China’s largest trading partner and China is the EU’s second largest.

Such a close bond means that when Europe is in deep crisis, China will not act like an onlooker. Instead, as a true friend and partner of Europe, China is willing to extend a helping hand and will be happy to see a quick recovery of the European economy.

In the latest show of solidarity with the EU, China’s top political advisor, Jia Qinglin, said last week during his visit to Greece that China has been a long-term investor in the sovereign debt market of Europe and will continue to support Europe and the euro in the future.

Beijing’s good-will gesture is a good response to those who see China as a threatening rival to Europe. Despite differences in politics, economy and culture, China and the EU are still good friends and partners, and can cooperate in a mutually beneficial manner

However, amid such an unprecedented crisis in Europe, China can neither take up the role as a savior to the Europeans, nor provide a “cure” for the European malaise.

Obviously, it is up to the European countries themselves to tackle their financial problems. But China can do within its capacity to help as a friend.

Thursday’s rescue package includes a 50-percent writedown of the Greek government debt and a significant increase of the firepower of Europe’s bailout fund. Such measures will stimulate confidence in the short term.

But the deal is just the start of a long and difficult process to solve the crisis for good. More concerted efforts are needed.

Meanwhile, as the eurozone debt issue is set to become a central subject at the upcoming Group of 20 summit in Cannes, France, China hopes that the conference will help tackle the sprawling financial challenges, restore market confidence and boost world economic growth.

It is advisable that at the summit European leaders take heed of the voices of emerging economies, whose remarkable contribution to world economic recovery and growth deserves better understanding and reciprocal treatment.

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