China will bail out Europe

China will bail out Europe December 27, 2010

Towards the Chinese Century and world domination:

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.

‘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.

via Fresh humiliation for euro zone as China says it will bail out debt-ridden nations | Mail Online.

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What Are Your Thoughts?leave a comment
  • SKPeterson

    If bailing out every failed government that spends too much money is leadership, then I say let the Chinese have at it. I think the Germans are the smart ones in this play.

  • SKPeterson

    If bailing out every failed government that spends too much money is leadership, then I say let the Chinese have at it. I think the Germans are the smart ones in this play.

  • DonS

    Let’s put things in perspective here. Apparently, at least at the moment, we’re talking about a $5 billion purchase of euros by China’s central bank. It’s extremely overbl0wn hype to claim this will “bail out” debt-ridden countries in the euro-zone. Other central banks do this type of thing on a routine basis, to a much greater scale.

    The article also makes the claim that the Chinese economy will overtake the U.S. economy in two years. In the fine print, it notes that this is just really in “buying power”, including domestic buying power. In actual dollars, the Chinese GDP is $5 trillion, while the U.S. GDP is $15 trillion. Moreover, the Chinese population is 1.3 billion, while the U.S. population is 300 million. So actual per capita U.S. GDP is 12 times Chinese GDP.

    Just keeping things in perspective here.

  • DonS

    Let’s put things in perspective here. Apparently, at least at the moment, we’re talking about a $5 billion purchase of euros by China’s central bank. It’s extremely overbl0wn hype to claim this will “bail out” debt-ridden countries in the euro-zone. Other central banks do this type of thing on a routine basis, to a much greater scale.

    The article also makes the claim that the Chinese economy will overtake the U.S. economy in two years. In the fine print, it notes that this is just really in “buying power”, including domestic buying power. In actual dollars, the Chinese GDP is $5 trillion, while the U.S. GDP is $15 trillion. Moreover, the Chinese population is 1.3 billion, while the U.S. population is 300 million. So actual per capita U.S. GDP is 12 times Chinese GDP.

    Just keeping things in perspective here.

  • Didn’t the selling and buying of bad debt contribute to the economic downturn? Will when theses debt investments fail cause economic chaos in China? Just asking.

  • Didn’t the selling and buying of bad debt contribute to the economic downturn? Will when theses debt investments fail cause economic chaos in China? Just asking.