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12/30/10

China emerges as potential saviour for crisis-hit Europe -

China, already the banker to the United States and a major investor in emerging markets, is now positioning itself as the potential "white knight" saviour to debt-laden Europe, analysts say.

Beijing has vowed to support European countries struggling under mountains of debt by buying their government bonds, which experts say could help ease tensions over a range of trade issues as well as boost China's global standing.

Backing the euro also serves the Asian country's own interests by helping to ensure its biggest trade partner continues buying its exports while also diversify its world-leading foreign exchange holdings away from the dollar.
Chinese foreign ministry spokeswoman Jiang Yu told reporters on Thursday that the European Union would "be one of the major markets for our forex investment" in the future.

European officials however insist no incentives such as recognition of China's market economy status or a reconsideration of an arms embargo have been offered in return for Beijing's much-needed financial lifeline.


For more: China emerges as potential saviour for crisis-hit Europe - The Economic Times

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