Thursday, December 23, 2010

EU Badly Needs Beijing Bond Backing

by Patience Wheatcroft

Wall Street Journal

December 23, 2010

The Diaoyutai State Guesthouse in Beijing was once the residence of Madam Mao. Now it provides China with an equivalent of Camp David, a high security compound for state visitors, and at the beginning of this week it was the site for the 3rd EU-China High Level Economic and Trade Dialogue.

Although the official communiques describe the talks in positive terms, there must have been moments when the EU delegation reflected ruefully on how the relative standing of the two blocs had changed since Chairman Mao's grim Cultural Revolution. A hint of what really went on inside the 800-year-old building came from the Chinese commerce minister, Chen Deming, who told the People's Daily: "We want to see if the EU is able to control sovereign debt risks and whether consensus can be translated into real action to enable Europe to emerge from the financial crisis soon and in a good shape."

As much of Europe continues to struggle with its mountainous debts, China has let it be known that it will be prepared to help out by buying bonds from stricken Greece and Portugal but part of the price will be enduring lectures from the new paymasters.


No comments: