mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
China to EU: I’m Still Not Your Daddy

China’s message to the Eurozone: don’t count on us. From the WSJ:

“We can’t just go save someone,” said Gao Xiqing, president of China Investment Corp., China’s huge sovereign wealth fund. “We’re not saviors. We have to save ourselves,” he said at a weekend [IMF] panel discussion.

If Europe decided to issue euro-zone bonds—debt guaranteed by all euro-zone members—CIC would consider becoming a purchaser, he said afterwards. “If it has a risk profile that fits into our allocation, we’ll buy some,” Mr. Gao said. “But don’t expect us to buy more than our risk appetite would take.”

In reality a European meltdown would most likely create a serious economic crisis in China.  Directly, because Europe is an important market for Chinese goods, and indirectly because a European crash would almost certainly throw the US back into recession — giving Chinese exports another hit.  On the other hand, if thrifty Germans object to bailing out lazy Greeks, ordinary Chinese would be even more furious to find that their hard earned reserves were going to subsidize the lifestyles of affluent Europeans.

There are no magic solutions to the problems facing Europe, no bags of Chinese gold, no clever central banking tricks.  The next few weeks and months will show once and for all how committed Europeans are to the project of union which has absorbed so much of their political attention over the last sixty years.  Americans should not underestimate the depth of Europe’s determination to make the union, and the euro, stick — but if the EU as we’ve known it survives this crisis, it will be a very close run thing.

Features Icon
show comments
  • Peter

    The Europeans elite can only create a union through brutal oppression of countries.

  • Jacksonian Libertarian

    “Americans should not underestimate the depth of Europe’s determination to make the union, and the euro, stick”
    I think the rank and file Europeans are much less enamored of the EU than the Establishment Political Classes. Even the French voted down the EU constitution, and then got punked as the Political Class did an end run on them. If it comes to a vote, the EU is toast.
    For Political Class think “Gone Washington” and you will realize how tone deaf they are.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service