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Is Europe China?

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Der Spiegel reports on moves by China to buy up sovereign debts in Europe:

China’s leadership has launched a charm offensive aimed at Europe. The country’s vice premier, who is visiting Spain and Germany this week, has promised that Beijing will continue buying up government debt to support the troubled euro zone. He has also called for more bilateral trade.

There may be no end in sight for Europe’s sovereign debt crisis, but at least one country still believes in the euro. The Chinese leadership has promised its support for the euro zone in its hour of need as part of a charm offensive aimed at strengthening ties with the European Union.

In a guest editorial published in Wednesday’s edition of the German daily SĂĽddeutsche Zeitung, Chinese Vice Premier Li Keqiang promised that China would support the EU in the fight against the euro zone’s sovereign debt crisis. “China’s support of the EU’s financial stabilization measures and its help to certain countries in coping with the sovereign debt crisis are all conducive to promoting full economic recovery and steady growth,” he wrote.

On Monday, he published another guest editorial in the Spanish newspaper El Pais ahead of a visit to Spain, in which he said China would continue to buy Spanish bonds. “We have confidence in the European financial market, and, in particular, the Spanish financial market,” he wrote. The promise of help is likely to be welcome in Spain, which some observers fear may have to ask for help from the EU’s rescue fund, as Ireland and Greece have already done.

China has a wonderful way of converting a crisis to an opportunity. Can it sustain this level of spending? Twenty years ago the German state nearly collapsed when the Western part bought over the Eastern.

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Written by Arhopala Bazaloides

January 7, 2011 at 2:30 am

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