CHINA AND EUROPE’S BAILOUT

CHINA SHOULD NOT SAVE EUROPE

By Andy Xie

China.org, December 3, 2011

There are five reasons why participation in any bailout plan for the Eurozone area is not in China's best interest.

First, the fiscal payback is not good. So far, no fruit has been borne by China's financial adventures in overseas markets. Investments in the Blackstone Group, Morgan Stanley and Rio Tinto Group have all failed. Since state-owned financial institutions mix business and politics, decision-making is often arduous. These failures have proven, thus far, that China's state financial system is not capable of selecting and operating overseas investments.

Secondly, Europe will not repay China's assistance politically. Although multinational corporations like BMW, Mercedes-Benz and Carrefour make huge profits in China, the European media and politicians blame China for their unemployment woes. The European Union's refusal to recognize China's market economy is solid proof of prevalent attitudes towards China in the region. The EU's discontent with China is growing with the worsening of Eurozone debt crisis. Assistance in a bailout may result in further worries about China's true intentions, harboring even stronger opposition from critics.

Thirdly, China's assistance would greatly weaken German influence in Europe, and imbed China in the quagmire of European politics. China needs at least ten more years before it will be poised take on issues related to handling of European affairs.

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