China will expand investment in Europe: Wen

DALIAN, China — Premier Wen Jiabao said China will continue to expand its investment in the eurozone and called on Western countries facing a crippling debt crisis to "put their houses in order". As Europe's struggling economies look to cash-rich China as a possible rescuer, Wen on Wednesday also urged EU leaders to reciprocate by according the country full market economy status ahead of schedule. Beijing has long demanded that the European Union and United States accord China full market economy status, a technical designation that would remove certain restrictions to Chinese exports and investments in Europe.

Full text on AFP

So China offers a helping hand to Europe - and according to German articles also to USA, but asks to be recognized as market economy and demands less restrictions for Chinese goods.
The first does not seem too much, especially since China is planned to be accepted as market economy in 2016 anyway.

It could be a relief, also for those, who are standing next in the qeue to go down the financial plug hole, like Italy and Spain.
On the other hand China is longing for more influence and power. Following the rule not to bite the hand that feeds you, Tibet and Taiwan would get totally out of focus, I guess.

Reuter's correspondent John Foley even calls it a blackmail:
BREAKINGVIEWS - China's friendly blackmail of EU may do the trick

But if one is drowning in the water, would one reject the hand that reaches out? Or is there enough power left to get out of the mess on our own - in Europe and USA?

reply to post by Siddharta


All I can say is good luck to you!

reply to post by Siddharta


I think China is more interested in having less trade restrictions than actually helping the EU out, but at the same time it's only reasonable. I don't see this as black mail at all; the EU got itself into the situation it is in. China is merely offering help and asking for less trade restrictions in return.

But yeah... China probably couldn't care less about the EU China is strictly business in my opinion.

It is a little bit funny, since China got full development aid until 2008 from Germany. Now it seems things turn around and China is ready to give development aid to Europe.
I wonder if Saudi Arabia too will send some development aid here, because as China they got development aid until 2008 from Germany.

Meanwhile the reigning parties in Germany are angry with each other. The vice chancellor and chef of the liberals dared to think loudly about a total bankrupt of Greece and the possibility to kick Greece out of the EU. Chancellor Merkel gave him a harsh comment to be careful with his words. Who knows, maybe this government won't last until the next elections.

And since Greece did not show any movement to get out of the huggermugger they probably won't try harder when they can expect money from China.

If trade with China becomes less restricted (unrestricted?) but they aren't really a market economy then won't this do more harm than good to the EU? The Chinese mixed market system that exists today is, to my knowledge, a sort of command economy with private property. Can any econ experts tell me whether or not this would give them an edge in an unrestricted competition with Western industry?