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China offers Merkel some comfort for Europe

The Local · 6 Feb 2012, 08:06

Published: 06 Feb 2012 08:06 GMT+01:00

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"Firstly, our biggest export market is Europe," Wen said in the southern city of Guangzhou on Saturday, adding that Europe was also a main source of technology for China.

"Helping stability in the European market is actually helping ourselves... We have to keep import and export policies stable."

Wen was echoing comments he made on Thursday during German Chancellor Angela Merkel's visit to China, intended to boost her hosts' confidence in Europe.

At a conference with Merkel in the capital on Thursday, China's premier warned of an "urgent" need to solve the European debt crisis and said Beijing was looking at ways it could contribute to bailout funds.

The sovereign debt crisis in Europe has seen a wave of credit-rating downgrades and brought Greece to the brink of bankruptcy.

Wen called on the international community to work together on the embattled region, which is China's top export market.

"China is investigating and evaluating ways, through the International Monetary Fund, to be more deeply involved in solving the European debt problem via ESM/EFSF channels," Wen said.

He was referring to the European Financial Stability Facility, a temporary rescue fund that was established to help struggling economies in Europe, and the European Stability Mechanism - a newer, permanent fund.

Story continues below…

China, the world's second-biggest economy, has watched with increasing concern as the debt crisis has deepened, repeatedly urging European leaders to get a grip on the situation.


The Local (news@thelocal.de)

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Your comments about this article

10:07 February 6, 2012 by zeddriver
Be careful. You may start sliding down the same slippery slope that tripped up America. Slowly over decades the lure of cheaply made Chinese goods will cause your companies to close down more and more factories. And of course the Chinese severely under value their currency making their goods even cheaper. Want to know what kind of people you are dealing with? Just look at the cases of BMW and Mercedes counterfeit cars. These companies are the bread and butter of German manufacturing excellence. And the Chinese court had the nerve to tell BMW that even though the counterfeit X5 even had BMW badges on the bonnet that it wasn't really counterfeit. Yes, on one hand. China does want to help Europe's debt crisis. But only because it will benefit China and not Europe.
20:31 February 6, 2012 by carlm
Komrade zeddriver.

America, I assume you mean the United States, didn't get tripped up by China. America got tripped up by kommie government policies that punish success and reward failure. The most prominent of said policies is the Community Reinvestment Act of 1977, which over the decades grew into a monster that forced lenders to loan money to people who weren't good credit risks. This and other "home ownership" legislation, Fannie Mae, Freddie Mac and still more, created the infamous Securitized Investment Vehicle or Sub Prime Mortgage which led to the financial meltdown. Any role that China played in this disaster was merely coincidental/insignificant. Bottom line, when you force lenders to lend to dead beats you wind up with a lot of worthless loans that, if great enough, could lead to the down fall of the financial system.

Cheap imports raise living standards. You might consider reading Adam Smith's "Wealth of Nations" or similar to clear up your misunderstanding of the nature of foreign trade. Komrade.
21:37 February 6, 2012 by zeddriver

Please spare me the komrade remarks.

I agree with you. But. I do believe that when a nation such as America who built itself up on it's manufacturing industries. Sells all that industrial strength for a short term profit. It can bite you. We in America can't even build a plane for the military without getting the parts form China.

Financing old government debt instead of paying it down while making new debt to buy votes via the programs you stated is what is was talking about. Germany is heading down that same road. While at the same time slowly selling it's manufacturing to China.
22:06 February 6, 2012 by carlm

Don't blame US business for the de-industrialization of the country. The government here has for decades done everything in it's power to make life difficult for manufacturing. The Obama administration especially with a marauding EPA banning one chemical or fuel after the other, in spite of a lack of legal authority. Combine that with the absurd legal climate, union power and so on and a business would be nuts to try and make anything in the country. A perfect example is the NLRB suit against Boeing and their new two billion dollar 787 plant in South Carolina due to objections from labor unions (SC is a right to work state and the new plant is non union). The issue has been settled, but I can guarantee that Boeing will think twice before opening another plant and other large manufacturers won't forget it.

You tend to reap what you sow.
22:57 February 6, 2012 by coffejohn
I simply fail to understand why Merkel is dragging EU pride through the mud to get "investment" from China, talk about "beware of Greeks bearing gifts", I would be terrified of Chinese gifts.

Its not even for the benefit of Germany so why is she doing it. I can only assume that the alternative is to tell the rest of the EZone to do as she has told them and sort out their economies on the German model.

She should stand by her principles rather than try to sell the EU to China.
23:50 February 6, 2012 by zeddriver

We are far more in agreement than not.

I do believe that the US manufacturers need to take a far more aggressive public stance. The most that I hear from them even from outside the main stream media is that the profits and the dividends for the share holders has deminished to the point that they need to go overseas. So when they tell their story to the common man that does not posses an MBA. it always sounds as if they are more than willing and nearly joyful to cut jobs in America in exchange for profits. As opposed to the fact that the problem lies in Washington. The industries in the states really need to improve their PR with the citizen.
11:13 February 7, 2012 by emejota
China would do good to leave their money out of the fail zone. They might need it soon for themselves, when european Union and the euro will fail, as social welfare systems crash and may provoke civil war-like conditions throughout large parts of the continent.
11:47 February 7, 2012 by Anth2305
In this week's BBC 'Top Gea'r programme, Jeremy Clarkson and James and May went to China to see what was on offer, first they drove a five year old three wheeled joke car and then compared it to a couple of the cars on offer now, which admittedly although not up to Western standards, nonetheless offered very good value for money (at three to four and a half thousand UK pounds) their verdict was that when you see how far they've progressed over the last five years, then don't be surprised to see many of us driving Chinese cars in another five years time.

As someone who can remember the 1960s very well, I recall just how complacent people were back then towards the fledgling Japanese auto industry, the difference this time is that we actually appear to be actively engaged in aiding and abetting our competitors
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