CHINA:EUROPE CAN solve the sovereign debt crisis, China's president Hu Jintao said after the Group of 20 summit, and China was committed to reforming the global financial system and boosting economic growth.
“We believe Europe has the wisdom and ability to solve the debt problem,” a statement from the foreign ministry quoted Mr Hu as saying. “China always supports the efforts made by Europe to deal with the global financial crisis and realise an economic recovery.” Mr Hu’s attendance at the Cannes G20 had delivered “fruitful” and “balanced” achievements. His remarks were published on the foreign ministry’s website.
Europe has been keen for Beijing to help beef up its rescue plans by investing some of its €2.26 trillion in foreign reserves, but China has been cautious in its response.
The G20 summit on the French Riviera ended with the rest of the world telling the euro zone to sort out its own problems by fixing the debt crisis before any fresh funds would be freed up.
The Chinese message on the outcome of the G20, at which it has played a more commanding role since the financial crisis struck in 2008, was broadly positive.
All the nations attending the Cannes summit were committed to further co-ordinating macro-economic policies, stabilising financial markets, encouraging economic growth, improving global economic governance and working together to maintain the economic recovery, Ma Zhaoxu, spokesman for the Chinese delegation, told the Xinhua news agency.
Cheng Siwei, a former top Chinese parliamentarian who remains a key adviser to the government, said at the weekend that while China was willing to help its largest export market, there were limits to what it could deliver.
“China certainly hopes the debt crisis could be resolved. If the crisis spreads, it could lead to a break-up of the euro zone and affect the global monetary system as the euro is the second-largest reserve currency,” said Mr Cheng.
“But don’t pin high hopes on China. China cannot be a hero to the rescue. China will lend a helping hand within its capacity but Europe must rely on itself.” China has bought some bonds issued by the heavily indebted European countries, including Ireland as well as Greece, Portugal and Spain – but Mr Cheng said that to continue these purchases was too risky.
He addressed a key political condition linked to China supporting the euro zone bailout: Europe should recognise China’s market economy status. He said this would count as a “friendly gesture”.