China says it is willing to bail out the debts of the EU.
58 replies, posted
[quote]China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.
In a fresh humiliation for Europe, Foreign Ministry spokesman Jiang Yu said it was one of the most important areas for China's foreign exchange investments.
The country has already approached struggling European countries with financial aid, including offering to buy Greece's debt in October and promising to buy $4billion of Portuguese government debt.
Today Portugal had its credit rating downgraded by the Fitch Ratings agency amid mounting concerns over the country's ability to raise money in the markets to finance its hefty borrowings.
Fitch said it was reducing its rating on the country's debt by one notch to A+ from AA- and warned that further downgrades may be in the offing by maintaining its negative outlook.
'To have any discernible effect China will have to buy a lot more than 5billion euros if they expect to have any impact on the negative sentiment surrounding Europe,' said Michael Hewson, currency analyst at CMC Markets.
China's astonishing economic growth has put it on track to overtake America as the world's economic powerhouse within two years, a recent report claimed.
But experts believed still be some years before America's leadership role is really challenged - largely because Beijing has given no indication it is ready to take on the responsibility of shepherding the world' economy.
This foray into the future of the euro could be a signal from Beijing that it is ready to change that perception.
The euro rose temporarily on the news of China's support - but was sinking again this morning to a three-week low against the dollar.
The single currency earlier fell to around $1.3050, below its 200-day moving average currently located at $1.3092 on trading platform EBS.
Investors have pushed the euro beneath this key support level for the past three sessions, only to see the currency bounce back later in the day.
Analysts said the euro will likely hold above $1.30 in the coming days, with traders reluctant to place big bets before year-end.
The outlook for the single currency remains shaky, with fresh losses expected into 2011, they added.
The Financial Times reported yesterday that China had offered to take more 'concerted action' to support European financial stabilisation.
It cited unnamed senior European officials after talks with Chinese Vice Premier Wang Qishan.
Portuguese officials have said the government is trying to diversify its debt investor base, with China as a priority.
Finance Minister Fernando Teixeira dos Santos met Chinese Finance Minister Xie Curen and the head of the People's Bank of China during a visit to the country last week.
But it is unclear whether Beijing would be prepared to take on so much fresh exposure to Portugal, after domestic political pressure to invest the country's foreign reserves more carefully.
Chinese investment funds suffered from large, high-profile losses during the global financial crisis.
In October, during a visit to Greece, Chinese Premier Wen Jiabao offered to buy Greek bonds when Athens resumed issuing.
A month later, President Hu Jintao visited Portugal and offered 'concrete measures' to help the weak economy, but stopped short of promising to buy Portuguese bonds.
It is still believed that it will be some years before China actually overtakes the U.S. to become the world's largest economy.
Politicians argue that technology is still behind and much of the country still lives in poverty.
And in another economic measure, output per person, China lags way behind the US.
Last year, the International Monetary Fund calculated gross domestic product per head in the US at $46,000. The GDP breakdown in China was just $4,000 per person.[/quote]
[url=http://www.dailymail.co.uk/news/article-1341110/Fresh-humiliation-euro-zone-China-says-bail-debt-ridden-nations.html]Source[/url]
Great, the last thing we need is another bailout.
Now they're just rubbing their success in our faces. :colbert:
:china:
[QUOTE=DamagePoint;26943192]Great, the last thing we need is another bailout.[/QUOTE]
Acutally, that's the first thing you need after stimulating an economy.
China isn't a bad country, but I do hope they loosen up with censoring before they end up being the largest economy in the world. You wouldn't want to have a third of the world population think what a single government wants it to think.
Doubt the EU will agree to this.
[QUOTE=R3mix;26943327]Doubt the EU will agree to this.[/QUOTE]
Why? China already invests billions of dollars in the Eurozone.
This just in, China Buys Europe, mentions something about turning it into an annex/kitchen extension.
[QUOTE=DogGunn;26943249]Acutally, that's the first thing you need after stimulating an economy.[/QUOTE]
But then China will own half of Europe. Which is not a very good position to be in from a strategic standpoint, when China owns half of your economy.
[QUOTE=DamagePoint;26943563]But then China will own half of Europe. Which is not a very good position to be in from a strategic standpoint, when China owns half of your economy.[/QUOTE]
Not necessarily. This bail out package probably is just a bail out package. It's China's main interest to see that the Eurozone economies return to normal, as it will help expand China's economy in return.
Wow, China is really funny. It's really just them being:
" Need help there EU? :smug: "
[QUOTE=Clavus;26943319]China isn't a bad country, but I do hope they loosen up with censoring before they end up being the largest economy in the world. You wouldn't want to have a third of the world population think what a single government wants it to think.[/QUOTE]
[img]http://www.lionsledbysheep.com/wp-content/gallery/07-china/tiannanmen-protest-opt.jpg[/img]
I can definitely see China becoming the new USA in the next few decades with an uproar or riot (which we've seen countless this past years), and becoming a full democracy/republic.
Well it was only a matter of time before the USA stopped being the leading superpower
[QUOTE=DogGunn;26943774]Not necessarily. This bail out package probably is just a bail out package. It's China's main interest to see that the Eurozone economies return to normal, as it will help expand China's economy in return.[/QUOTE]
Exactly, since China's economy heavily depends on western nations spending money on products produced in China.
Imagine what situation China would be in, if they didn't produce much of our cheap goods and sell it to us.
The country would probably be in poverty.
Also the leader(s) of china can use this as a positive PR stunt, to improve China's international image.
[QUOTE=DamagePoint;26943563]But then China will own half of Europe. Which is not a very good position to be in from a strategic standpoint, when China owns half of your economy.[/QUOTE]
They bought tons of U.S debt and nothing has really happened.
Beggars can't be choosers, china isn't wanting to take over they want to stabilize the economy because in return it will help their own.
Don't do it Europe. This is why the US is where it is now. It's a trap! They'll buy you too!
[QUOTE=Clavus;26943319]China isn't a bad country, but I do hope they loosen up with censoring before they end up being the largest economy in the world. You wouldn't want to have a third of the world population think what a single government wants it to think.[/QUOTE]
Tiananmen square massacre happened 20 years ago but people in china think it's a conspiracy due to extensive censorship.
Then you look at their appalling standards for work safety and health safety and all the deaths due to preventable things.
They're banning words people are allowed to use on the news due to fears that their culture is getting degraded.
You really going to say this isn't a bad country? I mean it's obviously relative, these just aren't things that a "good" country would be doing.
There's obvious reasons why they're doing this, they're not offering to do this because they're nice chaps that legitimately care about people in other countries.
[QUOTE=MR-X;26944455]They bought tons of U.S debt and nothing has really happened.
Beggars can't be choosers, china isn't wanting to take over they want to stabilize the economy because in return it will help their own.[/QUOTE]
I think China has a little more then that up their sleeve. Their a little more then "willing" to bail out imo
[QUOTE=Detective P;26945455]Don't do it Europe. This is why the US is where it is now. It's a trap! They'll buy you too![/QUOTE]
[QUOTE=JDK721;26944425][img_thumb]http://www.corbisimages.com/images/67/5F5B6E90-6088-4E63-81F3-14EC174720E8/42-20713841.jpg[/img_thumb][/QUOTE]
It's worth noting that the American government didn't open fire on these protestors.
[QUOTE=sloppy_joes;26945544]There's obvious reasons why they're doing this, they're not offering to do this because they're nice chaps that legitimately care about people in other countries.[/QUOTE]
Exactly, they're doing this because they know it will help their economy in the long-run.
[QUOTE=Mr.Dounut;26944307]I can definitely see China becoming the new USA in the next few decades with an uproar or riot (which we've seen countless this past years), and becoming a full democracy/republic.[/QUOTE]
theyre the second largest economy in the world
[QUOTE=Jiyoon;26945784]theyre the second largest economy in the world[/QUOTE]
Until the workers figure out they're being fucked over, riot until democracy, then they become like the US and dump their shit into India.
[QUOTE=Sottalytober;26946059]Until the workers figure out they're being fucked over, riot until democracy, then they become like the US and dump their shit into India.[/QUOTE]
they know theyre being fucked, but the free market is appealing to them.
[QUOTE=Jiyoon;26946080]they know theyre being fucked, but the free market is appealing to them.[/QUOTE]
The workers will eventually get tired of it.
[QUOTE=Sottalytober;26946113]The workers will eventually get tired of it.[/QUOTE]
yup, can you imagine a communist revolution within a communist country?
America offer chinese workers jobs and pay them higher wages and then the Chinese economy will crash. Although the Chinese people are so opressed it will never happens.
They are just using this as leverage.
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