CHINESE PREMIER Wen Jiabao said it was in his country’s interests to help the euro zone get through the debt crisis, in remarks aimed at easing scepticism in the world’s second largest economy about propping up Europe.
‘‘Now Europe is facing a debt crisis and we must consider relations with Europe strategically to protect our national interests,’’ Mr Wen said.
China should help stabilise the European market, which is actually helping China itself, as Europe has been both China’s largest export market and the biggest source of technical imports, he said.
His remarks were carried on the state news agency Xinhua and he made them during a visit to the southern province of Guangdong.
With about a quarter of its $3.2 trillion (€2.44 trillion) foreign exchange reserves in euro, China has repeatedly voiced confidence in the euro zone. However, many Chinese people feel China, which is technically still a developing economy, should not be forced to spend money to help prop up wealthy nations.
Beijing has been reluctant to reveal measures it would take to support Europe, and again, the Chinese premier’s latest comments on the euro crisis did not include any specific commitments to European economies.
Mr Wen’s comments strengthen the line he took during German chancellor Angela Merkel’s recent visit to China, when he said Beijing was considering upping its stake bailout funds to address the European debt crisis.
One of the concessions that China wants from the European Union is to recognise China as a market economy.
China fears the crisis could trigger friction in trade relations and have a negative impact on China’s exports, and Mr Wen said China’s exporters would have to adapt and open up new markets because the country’s exports to advanced economies, including Europe, have been hit.
‘‘Import and export policy must maintain overall stability. If there must be adjustments, it should be more in the form of encouragement than restrictions,’’ he said, speaking to Guangdong manufacturers.
Last week Mr Wen said China was examining ways of how to help Europe.
‘‘China is also considering increasing its participation in the solution of the European debt crisis through the channels of the EFSF and ESM,’’ he said at a joint briefing with Ms Merkel.
The €500 billion ESM, which is due to come on stream in July, is expected to replace the temporary European Financial Stability Facility (EFSF) fund used to bail out Ireland, Portugal and Greece.
Mr Wen was visiting Guangdong province, which is China’s main manufacturing centre, to get input ahead of the two annual sessions of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference, which are held in March.
He made some very telling comments during the Merkel visit.
‘‘Some people say this means China wants to buy Europe,’’ Mr Wen said at a briefing with Ms Merkel. ‘‘China doesn’t have this intention and doesn’t have this ability.’’
Mr Wen, who is expected to start the process of handing over his position to his anointed successor, Li Keqiang, later this year, also repeated his support for further reform.
‘‘Opening up and reform should be implemented unswervingly, or there will only be a dead end,’’ said Mr Wen, in reference to the former Chinese supreme leader, widely credited as the architect of reform more than three decades ago, Deng Xiaoping, who made a famous speech during his inspection tour of southern China 20 years ago.
'ROUGH LANDING' FOR CHINA? DECELERATION CONCERNS MOUNT
CHINA'S ECONOMY may be headed for a "rough landing", according to Singapore prime minister Lee Hsien Loong. "They have built a lot of infrastructure. They have built a lot of capacity in many industries, autos, some of the electronics industries," Mr Lee told CNN yesterday.
"There may be a rough landing, but they will get through it."
A Chinese government report on February 1st showed export orders fell last month even as manufacturing expanded.
The stronger manufacturing has boosted concern that the world's second-largest economy will decelerate further as the government refrains from loosening monetary policy to tame inflation and curb property prices.
China's economy expanded 10.4 per cent annually in the past 10 years, five times the pace of the US, as the government boosted spending on roads and bridges and manufacturers exported everything from toys to socks.
China's economy grew at 9.2 per cent in 2011, while expansion will slow to 8.5 per cent this year, according to economists' estimates compiled by Bloomberg. Asked about China's role in Asia, Mr Lee said: "Every superpower or big country has to be looked on with a certain careful respect by others not quite so huge." – (Bloomberg)
