China becoming Europe’s savior
Chinese Prime Minister Wen Jiabao is on his European tour with the EU economic trouble being in spotlight of the talks. China’s prospective status of the EU financial “savior” could bring the country new significance on the world economic arena.
”They become the savior, they become the large creditor for Europe,” investor and author Jim Rogers told RT. “They are going to have a very major seat at the table. It is going to improve their position in the IMF. It is going to improve their position with the World Bank. It is going to improve their position at the UN because the Europeans are going to be more and more friendly to China, because China is saving them.””The Chinese have huge international reserves … over three trillion US dollars in various currencies.” Rogers added. “Internally, yes, they have had too much inflation and they are trying to cool that inflation off, but their international situation – they have got lots if liquidity and can do whatever they want.” Chinese Prime Minister earlier pledged greater cooperation with troubled European nations, including the further purchase of their European debt. "China will consistently support Europe and the euro," Wen Jiabao said during his visit to Hungary on Saturday. “Trust is more important than currency and gold and now, during the debt crisis, we again bring trust to Europe." Chinese offer to support the ailing EU economy gives Beijing leverage in talks, while giving China side benefits, says economist Marco Pietropoli.“I guarantee that the Chinese will get their pound of flesh for this. It gives them a huge amount of leverage in the trade negotiations and puts them in a very strong position to get their way on a number of different issues,” he told RT.By offering loans to European nations China diversifies its reserves, which are dominated by the US government debts at the moment. It also boosts confidence of the market in Europe, giving stability to one of its major trade partners, Pietropoli said.
During his visit to Budapest last week, Wen Jiabao announced his willingness to purchase Hungarian bonds and offered the country a loan of over a billion euro. In Great Britain, his three-day visit has lead to sealing US$ 2.2 billion worth of contracts.
