Chinese Premier Wen Jiabao told visiting European Union leaders on Tuesday that China was ready to play a bigger role in supporting debt-hit Europe, but stopped short of revealing either the scale of likely investment or how Beijing would back the proposed bailout funds.
Chinese State media outlets, however, played down rising expectations of Beijing emerging as the EU's saviour, with the official People's Daily saying in a commentary “there is thus no such thing as ‘the poor person saving the rich person.'”
European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso sought Chinese help in meetings on Tuesday, while Europe considers the creation of a €500 billion European Stability Mechanism bailout fund. Last month, Mr. Wen told visiting German Chancellor Angela Merkel that China would likely support the EU either through the International Monetary Fund (IMF) or through the proposed bailout mechanisms.
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Mr. Wen told reporters following meetings that China wanted the EU to maintain ‘stability and prosperity' and was “ready to increase its participation in resolving the EU debt problems”. Chinese leaders have, in recent weeks, increasingly argued the case for supporting Europe in press briefings and through the State media.
Europe is China's biggest trading partner and a key destination for China's export sector, which sustains millions of jobs. A study released this week showed that China had doubled its investment in European firms over the past year, even as investment in the United States fell.
“We will see China taking the EU more seriously as a counterweight to the U.S. focussing on Asia,” said David Gosset, Director of the Academia Sinica Europea at the China Europe International Business School.
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Tightrope walk
China, however, faced a tightrope walk in calibrating its response to the eurozone crisis. “If China does too less it is blamed, and if China does too much it is blamed, so finding the middle way will be a difficult thing to do,” he said. The People's Daily commentary said China would not link its assistance to Europe with its other pending demands with the EU, such as the recognition of China's market economy status, expected to be granted in 2016, or the EU's arms embargo.
Any Chinese economic assistance “would be a purely economic decision”, the author of the piece, Feng Zhongping, who is the director of the Institute of European Studies at the China Institute of Contemporary International Relations, was quoted as saying by Reuters.
“China has no appetite or ability to ‘buy up Europe' or ‘control Europe' as some European commentators have said,” he said. “China has from the beginning strongly supported the EU and the euro, in clear contrast to the ‘talking down' of Europe in the international community.”
Mr. Gosset also contrasted China's response with the strong criticism levelled at the EU even by its traditional allies, such as Britain. He played down fears of China “buying up Europe” as overblown, pointing out that the size of the European economy was bigger than that of the U.S. China was unlikely to directly press the EU on either the arms embargo or granting market economy status, he said, which was likely to anyway be granted in 2016. “Probably what China wants to achieve [by helping the EU],” he added, “is to have a bigger voice in the IMF.”