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China Promises Support for Euro Zone
by BubbleBliss Wed Jan 05, 2011 9:09 am
China Promises Support for Euro Zone
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 Süddeutsche 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.
In recent months, China, which has foreign-exchange reserves worth an estimated $2.5 trillion, has been buying up bonds from troubled euro-zone members such as Greece and Portugal. Beijing is seen as wanting to diversify its investments out of fears of a devaluation of the US dollar. Currently around 70 percent of its foreign-exchange reserves are believed to be in the US currency.
'Favorable Opportunities'
Li is currently in Spain on the first leg of a European visit. He will arrive in Germany on Thursday for a three-day visit before heading to Britain on Sunday.
Speaking in Madrid on Wednesday, where he met Spanish Prime Minister José Luis Rodriguez Zapatero, Li said that China and the EU should deepen their cooperation and strengthen their strategic partnership. "I am confident that as long as we have full confidence, treat each other with honesty and make efforts in concert, we will surely be able to grasp favorable opportunities, overcome various challenges and achieve common prosperity of China, Spain and Europe," Li said, according to the Chinese news agency Xinhua.
During Li's visit to Germany, he will meet with German Chancellor Angela Merkel, Foreign Minister Guido Westerwelle and Economy Minister Rainer Brüderle. Li is considered to be a possible successor to the current Chinese premier, Wen Jiabao, when the top jobs are redistributed in a planned generational change in the Communist leadership in 2012.
Untapped Potential
In the guest editorial for the Süddeutsche Zeitung, Li also called for increased bilateral trade between Germany and China. He wrote that, although the two economies are "highly complementary," German investment in China makes up only 2 percent of its total overseas investment, while Chinese investment in Germany is just over $1 billion. The two countries "should continue to tap our potential," he wrote.
There should be more investment in the areas of modern agriculture, high technology, energy and environmental protection, Li argued in the piece. He promised that China would "protect intellectual property rights in order to provide a level playing field and a stable, orderly, transparent and predictable market environment for all market players." In the past, German firms have complained that Chinese companies have exploited joint ventures to get their hands on German companies' technical know-how.
In its cover story on China's rise this week, SPIEGEL reports that, in a meeting with Chinese Premiere Wen Jiabao, Jürgen Hambrecht, the CEO of German industrial giant BASF, complained of the "forced disclosure of know-how in exchange for investment decisions." He added: "That doesn't conform entirely to our expectations for our partnerships."
Indeed, many German firms fear that, through massive Chinese subsidies as well as the know-how obtained through joint ventures with Western partners, China could soon surpass the West in the high-tech sector.
In his Süddeutsche essay, Li also said that Germany should make it easier for Chinese firms to invest and set up subsidiaries in the country. Germany's bilateral trade with China was worth an estimated $140 billion in 2010, comprising almost 30 percent of China's trade with the EU. Germany's current economic upswing is largely due to Chinese demand for German exports.
dgs -- with wire reports
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 Süddeutsche 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.
In recent months, China, which has foreign-exchange reserves worth an estimated $2.5 trillion, has been buying up bonds from troubled euro-zone members such as Greece and Portugal. Beijing is seen as wanting to diversify its investments out of fears of a devaluation of the US dollar. Currently around 70 percent of its foreign-exchange reserves are believed to be in the US currency.
'Favorable Opportunities'
Li is currently in Spain on the first leg of a European visit. He will arrive in Germany on Thursday for a three-day visit before heading to Britain on Sunday.
Speaking in Madrid on Wednesday, where he met Spanish Prime Minister José Luis Rodriguez Zapatero, Li said that China and the EU should deepen their cooperation and strengthen their strategic partnership. "I am confident that as long as we have full confidence, treat each other with honesty and make efforts in concert, we will surely be able to grasp favorable opportunities, overcome various challenges and achieve common prosperity of China, Spain and Europe," Li said, according to the Chinese news agency Xinhua.
During Li's visit to Germany, he will meet with German Chancellor Angela Merkel, Foreign Minister Guido Westerwelle and Economy Minister Rainer Brüderle. Li is considered to be a possible successor to the current Chinese premier, Wen Jiabao, when the top jobs are redistributed in a planned generational change in the Communist leadership in 2012.
Untapped Potential
In the guest editorial for the Süddeutsche Zeitung, Li also called for increased bilateral trade between Germany and China. He wrote that, although the two economies are "highly complementary," German investment in China makes up only 2 percent of its total overseas investment, while Chinese investment in Germany is just over $1 billion. The two countries "should continue to tap our potential," he wrote.
There should be more investment in the areas of modern agriculture, high technology, energy and environmental protection, Li argued in the piece. He promised that China would "protect intellectual property rights in order to provide a level playing field and a stable, orderly, transparent and predictable market environment for all market players." In the past, German firms have complained that Chinese companies have exploited joint ventures to get their hands on German companies' technical know-how.
In its cover story on China's rise this week, SPIEGEL reports that, in a meeting with Chinese Premiere Wen Jiabao, Jürgen Hambrecht, the CEO of German industrial giant BASF, complained of the "forced disclosure of know-how in exchange for investment decisions." He added: "That doesn't conform entirely to our expectations for our partnerships."
Indeed, many German firms fear that, through massive Chinese subsidies as well as the know-how obtained through joint ventures with Western partners, China could soon surpass the West in the high-tech sector.
In his Süddeutsche essay, Li also said that Germany should make it easier for Chinese firms to invest and set up subsidiaries in the country. Germany's bilateral trade with China was worth an estimated $140 billion in 2010, comprising almost 30 percent of China's trade with the EU. Germany's current economic upswing is largely due to Chinese demand for German exports.
dgs -- with wire reports
BubbleBliss
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