Wandering China

An East/West pulse of China's fourth rise from down under.

Premier Wen Says China Considers Contributing to European Stability Fund [Bloomberg]

In some ways, if the world hasn’t caught on to what seems the Chinese style to international engagement yet – it’s all about biding time and concealing intentions. As mentioned in an earlier post, the Chinese were always going to get involved, it’s just a question of when is the optimum moment and who does the asking; despite an earlier side-step claiming they had little interest getting further entrenched in the cycle of bad debts and poor management.

Two reasons are apparent. First, to keep its biggest consumer market afloat. Second, to extend its sphere of soft power over former colonial powers.

Spending time in Taiwan and visiting the National Palace Museum has given me access to the original unequal treaties of China’s century of humiliation. The endless books on the topic in Taiwanese bookshops indicate its not just the mainland Chinese but the Taiwanese too who still feel this underlying resentment. Apart from that, it also gives the Chinese additional leverage in a zero-sum game to provide a net plus in terms of the Chinese government’s freedom of action domestically and on the global stage.

So – watch this space and look beyond what seems an altruistic international relations charm offensive.

Further reading: EU funding bailout possible by China Daily, Feb 3 2011.

– – –

Premier Wen Says China Considers Contributing to European Stability Fund
by Patrick Donahue in Berlin
Source – Bloomberg News, published Feb 3, 2012

Chinese Premier Wen Jiabao raised the prospect of contributing to the euro-area’s bailout programs, telling Chancellor Angela Merkel that China may be prepared to assist in resolving its debt crisis.

The Chinese government is considering funding options for the temporary European Financial Stability Facility and its permanent successor, the European Stability Mechanism, through the International Monetary Fund to help stabilize the monetary union, Wen said yesterday after meeting Merkel in Beijing. China has previously said that it needs more detail on any plan to contribute funds to the euro area.

China is “investigating and evaluating ways, through the IMF, to be more deeply involved using the ESM and EFSF channels in solving the European debt issue,” Wen said at a briefing alongside Merkel, who arrived in China early yesterday on her fifth visit to the world’s most populous country as chancellor.

European leaders have sought to tap China, the holder of the world’s largest foreign-exchange reserves, as they struggle to end to the two-year-old crisis. Merkel came from the latest European Union summit, where leaders this week locked in a treaty containing more stringent debt rules even as Greece inches toward an agreement with creditors to ease its debt load.

As a way to increase the euro-area’s firewall, leaders in October designed leveraging programs that could draw outside investment. Chinese Vice Finance Minister Zhu Guangyao said afterward that his government needed to hear more about particulars, such as the extent of loan guarantees and the way the senior-debt portion would be structured.

Chinese Central Bank Governor Zhou Xiaochuan declined to comment when asked about how Chinese participation in the bailout funds might work.

Juncker’s Skepticism

Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said steps to tighten fiscal discipline and tackle the sovereign debt crisis adopted at the Jan. 30 summit were “largely insufficient.”

EU leaders will need to take further steps when they convene again in early March, Juncker said in a speech in Luxembourg yesterday, adding that he seeks better coordination of economic policy across the bloc.

“We have an internal market, we have a common currency, but we don’t have a centralized economic authority,” Juncker said.


Filed under: Beijing Consensus, Bloomberg, Charm Offensive, Chinese Model, Economics, European Union, Finance, Foreign aid, Government & Policy, Greater China, Influence, International Relations, Mapping Feelings, Peaceful Development, Politics, Public Diplomacy, Soft Power, Strategy, Tao Guang Yang Hui (韬光养晦), The Chinese Identity, Trade

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