Eurozone Crisis, China and The Begging Bowl
With Europe turning to China to bolster its bailout fund, the BBC News Magazine examines the shift in global power over the past century and assesses the impact of European dependence on Chinese capital going forward:
In October 1911, China rose up in revolution. Four months later the last emperor had fallen and European moneymen were flocking to Beijing, eager to finance the bankrupt new republic.
In October 2011, another European moneyman headed for Beijing. But Klaus Regling, head of the European Financial Stability Facility, did not go there to lend to China. He was there to borrow, asking China to save Europe from economic disaster.
In just one century, China has gone from financial basketcase to the world’s banker, and Europe has made the same trip in the other direction. It is one of the biggest turnarounds in history. How did it happen? And, more to the point, what does it mean?
Business Insider published a chart from Nomura over the weekend demonstrating why China should not bail out Europe, while a cartoon appeared in today’s Global Times depicting the political turmoil surrounding Greece’s bailout plans. Yesterday, Al Jazeera posted a video interview with Chinese economist Jin Liqun, who remains skeptical about a Chinese investment in Europe’s recovery.
See also CDT coverage of the EU rescue package and speculation that Europe may ease human rights pressure on China in exchange for a bailout.