mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Quit Asking, I’m Still Not Your Daddy

Europe’s unending petitions for a big-check Chinese bailout are beginning to sound like a broken record. The FT covers its latest iteration:

Europe’s courtship of Beijing is moving to a more intense level. Klaus Regling, the chief of the eurozone bail-out fund, is in Beijing discussing possible support. Just a few days ago French President Nicolas Sarkozy conferred with Hu Jintao, his Chinese counterpart, to win Beijing’s support. They should not hold out their hopes too high. […]

As Wen Jiabao, premier, pointed out at the 2011 Dalian World Economic Forum, the European Union has first to put its house in order. When countries and political parties in the eurozone squabble among themselves over how to proceed, how can China support any hastily assembled rescue packages?

China’s $3.2 trillion in foreign exchange reserves is ample incentive for any faltering currency union with a massive sovereign debt crisis to repeatedly ask for help. Given the scale of the crisis and the intricate (a.k.a. unworkable) structure of the Eurozone, their concern is understandable.

China’s response, however, is equally predictable. As Via Media has pointed out before, if helping Europe means lending money at market rates on good security and buying valuable properties at attractive prices, you can count China in. But they operate as a wealth fund, not a charity. A healthy Europe is in export-pushing, US-balancing China’s best interest, but China isn’t ready to be Europe’s organ donor, sharing one of its two kidneys out of solidarity and love.

It’s simple, really.  China is like a bank.  If you don’t need money, the bank stands ready and willing to lend. If you are in trouble, you are on your own.

Let Europe put together a reasonable and practical plan, and the whole world will join in to be part of the solution.  Nobody wants Europe to fail.  But nobody can do for the Europeans what they cannot do for themselves.

Features Icon
show comments
  • Kenny

    Amazing how Europe still clings to its welfare state.

    Things over there will have to get a lot worse before then can hope to get better.

  • Jacksonian Libertarian

    They are desperate, and will continue to grasp at straws, including the US and China until the end. I wonder how long it’s going to take for the EU to fly apart? I think it took about 3 years for the Warsaw Pact and Soviet Union to fully disintegrate. Like a super slow motion train wreck, you’ll have plenty of time to make popcorn.

  • Luke Lea

    I’m no expert, but aren’t China’s $3.2 trillion in foreign exchange reserves mostly invested in U.S. Treasuries? If they sell those Treasuries and buy Euros instead, who is going to purchase the Treasuries they sell? The Fed? No matter how you look at it, it seems we’re all in this together.

  • Neville

    The Europeans seem to believe that the Chinese will be willing to pay to preserve the European social model as if it were some priceless cultural artifact. It will take them a while to get used to the idea that for at least 20 years the elites in countries like China and India have generally viewed Europe’s governance and strategy as a dysfunctional mess, something to be avoided rather than emulated, as the Chinese “has first to put its house in order” comment suggests.

  • Mike M.

    “Amazing how Europe still clings to its welfare state.”

    There’s nothing amazing about it, and it’s not just in Europe, but here in the U.S. as well. It’s the inevitable outcome of dependence and the official sanctioning of irresponsibility.

    I would estimate that more than 50% of the population of the west is at the point where they literally can’t even imagine life without the welfare state.

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