Behind China’s Charm Offensive in Europe
Chinese officials have stepped up their vows of support for Europe in the past several weeks, and have grown increasingly vocal about pledging to help Europe contain a sovereign debt crisis and accelerate a recovery. This past week, Beijing renewed a pledge to buy debt from Spain and other countries feared to be facing a bailout.
China’s backing appears aimed at curbing losses on its growing financial investments in Europe, as well as helping to thwart a deeper downturn in the economic bloc that has overtaken the United States as China’s largest trading partner.
Although surging growth is helping to transform China into an economic powerhouse, a worsening of Europe’s crisis would be bad for business because the European Union buys a quarter of all goods made in China.
“If you’re an export-driven economy like China, and the E.U. and the euro zone are your key export markets, it’s in your interest to stabilize the financial and economic situation,” said Ken Wattret, chief euro-zone economist at BNP Paribas in London.