Monday, October 31, 2011

China Has To Throw Europe A Lifeline To Rescue Itself

Forbes writes that all eyes will be on China at this week’s G-20 meeting in Cannes. The expectation—or at least the hope—is that Beijing will contribute to Europe’s bailout fund, the European Financial Stability Facility. The Greece-rescue plan announced on Thursday in Brussels calls for an increase in the size of the EFSF from 440 billion to a trillion euros.

At the press conference announcing the deal, French President Nicolas Sarkozy said that the EU would like support from Beijing, and he called his Chinese counterpart, Hu Jintao, to ask for help. EFSF chief executive officer Klaus Regling immediately flew to Beijing and held consultations with officials late last week.

In response to the overtures to China, President Hu praised Sarkozy and European leaders for showing “determination” but did not promise support for their plan. Then, Zhu Guangyao expressed Beijing’s reluctance after meeting with Regling. “We need to wait for the technicalities to be clear and also to carry out serious studies before we can decide on investment,” the finance vice-minister said.

Finally, Xinhua News Agency ran a commentary today explaining Beijing’s position. “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,” the official organ stated….

Learn more. Check out http://www.forbes.com/sites/gordonchang/2011/10/30/will-europe-rescue-china/
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