CHINA AND THE EU

WHY CHINA NEEDS A STRONG EU

Fraser Cameron

China Daily, June 24, 2011

Normally, the visit of Premier Wen Jiabao to Europe would catch the headlines. But as Wen Jiabao starts his visit to Hungary, the United Kingdom and Germany on Friday, all eyes will be focused on Europe's seemingly never-ending euro crisis. European leaders are holding a meeting in Brussels on Thursday and Friday, and the debt crisis is the top item on the agenda. 

The immediate crisis facing Greece has been averted, though, with European finance ministers agreeing to a new bailout package this week. 

At a media briefing before the premier's visit, Vice-Foreign Minister Fu Ying said that China had tried to help the European Union (EU) overcome its troubles by buying more European debt and encouraging bilateral trade, and that the future of the European economy was "vitally important" for China. China had not reduced its considerable reserve holdings of euros, she said. On the contrary, it has continued to buy the bonds of countries at the center of the crisis such as Greece, Portugal and Spain. 

Analysts say Chinese support has been important in stemming the depreciation of the euro. Today, it is just 5 percent below its peak against the US dollar, although many European companies would prefer to have a lower exchange rate. Support for the euro will help China in its twin track policy of increasing the international role of the yuan and allowing a gradual appreciation of its currency. 

(...) [artículo aquí]