Another year of crisis. Another meeting of heads of state. President Hu Jintao is scheduled to fly to Cannes, France, this week for the G20 summit - just one week after European leaders reached an agreement in Brussels to help contain the region’s debt crisis.
At this juncture, the world is asking what role China, with its bulging pockets and economic growth largely unscathed by the global financial crisis, can play in helping the world - and in particular Europe - with financial support.
At least French President Nicolas Sarkozy was not shy about the possible involvement of Chinese money after European leaders reached an agreement on Thursday. “If the Chinese, who have 60 per cent of global reserves, decide to invest in the euro instead of the dollar, why refuse?” he told CNN.
But with China, still markedly poorer than Europe on a per capita basis, faced with a responsibility that has never fallen on its shoulders before, does it have an understanding of what it means? Is it making a plan? And is it ready to act?
There is quite a mixture of views in the domestic press, showing that the opinion writers for the official media are only beginning to think about the country’s possible new role in the world.
The Chinese edition of the Global Times never wants to lag in commenting on the world. In an editorial on Friday, it said the very concept of using Chinese money to save the euro zone would be an irritant in both China and Europe.
Some European media, it said, still talk to China as if Europeans were the only first-class citizens of the world, even when they were asking China for financial support.
While in China, it noted, some internet users have raised the populist slogan of “Wenzhou before Ouzhou (Europe).” Wenzhou is a south eastern city where a liquidity crisis has hurt many privately owned enterprises.
Both extremes, arrogance in Europe and populism in China, tend to be a quicker reaction to global news than any official statement. But both extremes show ignorance, said the Global Times, a subsidiary of the official People’s Daily.
Then it declared: “China cannot afford to do nothing” to help Europe. This is determined by their intertwined interests as a result of globalisation. As a big country, China is obliged to pay its due to any major rescue plan.
At the same time, the tabloid also said that China’s help should not be expected to be “a very big, happy surprise”. Its participation in Europe cannot be very deep because of the lack of mutual trust lingering on both sides.
More specifically, China cannot make a greater commitment to the euro zone than its own rich and well-established member states.
In exchange for China’s funds, if Europe thinks it not in its best interests to lessen some of its trade restrictions on China, by agreeing to sell more technologies to it and recognising it as a full market economy, then China should not go all out to persuade the Europeans to do so, the Global Times said.
If China did have to play a part in Europe’s rescue mission, a commentary from the official China News Service said, prudence was highly recommended because China should not forget its own domestic poverty and must avoid any new financial hazards.
The commentary quoted Jin Liqun, the chairman of China Investment Corporation - the Chinese sovereign wealth fund - as saying that China should not increase its holding of European bonds and assets before a framework solution is in place for the euro zone debt problem.
Finance.21cn.com, a financial information website, quoted Dr Yin Jianfeng, deputy director of the Chinese Academy of Social Sciences’ institute of finance and banking, as saying that for China, setting conditions for Europe was not only prudent but a must.
China’s holding of any European bonds must be backed by adequate collateral, and must be denominated in yuan, he said.
2 comments:
Ed Zhang
30 October 2011
Another year of crisis. Another meeting of heads of state. President Hu Jintao is scheduled to fly to Cannes, France, this week for the G20 summit - just one week after European leaders reached an agreement in Brussels to help contain the region’s debt crisis.
At this juncture, the world is asking what role China, with its bulging pockets and economic growth largely unscathed by the global financial crisis, can play in helping the world - and in particular Europe - with financial support.
At least French President Nicolas Sarkozy was not shy about the possible involvement of Chinese money after European leaders reached an agreement on Thursday. “If the Chinese, who have 60 per cent of global reserves, decide to invest in the euro instead of the dollar, why refuse?” he told CNN.
But with China, still markedly poorer than Europe on a per capita basis, faced with a responsibility that has never fallen on its shoulders before, does it have an understanding of what it means? Is it making a plan? And is it ready to act?
There is quite a mixture of views in the domestic press, showing that the opinion writers for the official media are only beginning to think about the country’s possible new role in the world.
The Chinese edition of the Global Times never wants to lag in commenting on the world. In an editorial on Friday, it said the very concept of using Chinese money to save the euro zone would be an irritant in both China and Europe.
Some European media, it said, still talk to China as if Europeans were the only first-class citizens of the world, even when they were asking China for financial support.
While in China, it noted, some internet users have raised the populist slogan of “Wenzhou before Ouzhou (Europe).” Wenzhou is a south eastern city where a liquidity crisis has hurt many privately owned enterprises.
Both extremes, arrogance in Europe and populism in China, tend to be a quicker reaction to global news than any official statement. But both extremes show ignorance, said the Global Times, a subsidiary of the official People’s Daily.
Then it declared: “China cannot afford to do nothing” to help Europe. This is determined by their intertwined interests as a result of globalisation. As a big country, China is obliged to pay its due to any major rescue plan.
At the same time, the tabloid also said that China’s help should not be expected to be “a very big, happy surprise”. Its participation in Europe cannot be very deep because of the lack of mutual trust lingering on both sides.
More specifically, China cannot make a greater commitment to the euro zone than its own rich and well-established member states.
In exchange for China’s funds, if Europe thinks it not in its best interests to lessen some of its trade restrictions on China, by agreeing to sell more technologies to it and recognising it as a full market economy, then China should not go all out to persuade the Europeans to do so, the Global Times said.
If China did have to play a part in Europe’s rescue mission, a commentary from the official China News Service said, prudence was highly recommended because China should not forget its own domestic poverty and must avoid any new financial hazards.
The commentary quoted Jin Liqun, the chairman of China Investment Corporation - the Chinese sovereign wealth fund - as saying that China should not increase its holding of European bonds and assets before a framework solution is in place for the euro zone debt problem.
Finance.21cn.com, a financial information website, quoted Dr Yin Jianfeng, deputy director of the Chinese Academy of Social Sciences’ institute of finance and banking, as saying that for China, setting conditions for Europe was not only prudent but a must.
China’s holding of any European bonds must be backed by adequate collateral, and must be denominated in yuan, he said.
I also agree to above post suggestion.I think china can get a big market in any way.
Debt Management
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