Why China won't save the world

Discussion in 'China' started by Neil, Nov 2, 2011.

  1. Neil

    Neil Senior Member Senior Member

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    Is China's President Hu Jintao about to fish out his chequebook at the G20 summit in Cannes and, with a flourish, wipe away Europe's woes?




    From all the breathless speculation you'd think that was on the cards. The talk is all about how "China can save the world", or ride in and "rescue the Eurozone".

    Of all the G20 leaders President Hu may seem to be in an enviable position, China's economy growing at about 9% a year, holding a war-chest of $3.2 trillion (£2tn, 2.3tn Euros) in foreign exchange reserves.

    But it's worth considering that President Hu is not in such a powerful position. He's not about to "save" Europe, in fact he's probably as concerned as anyone else about the way Greece seems to be sinking deeper into the economic and political mire and the Eurozone may be heading for even more trouble.

    Most of the hype about China's ability to influence the situation is coming from people commentating from outside China. What is being said here is very different.

    "China can neither take up the role as saviour to the Europeans, nor provide a 'cure' for the European malaise," said the state-run Xinhua news agency at the weekend.


    Drag on Europe?


    To put things in perspective, for all China's rise, its economy accounts for less than 10% of global GDP at present, while the developed nations of Europe and America make up well over 50%.

    It is Europe - even in a time of crisis - that does much to power China's rise, rather than the other way round. Europe, we all know, is China's biggest export market. Last year it bought 280bn euros of Chinese goods.

    A new downturn in Europe would hit China hard. At the giant China import-export fair in Guangzhou this week almost everyone I spoke to said orders from Europe are falling and that's hurting China's exporters.

    By contrast, some say, China is a drag on Europe. It sells far more to Europe than it imports from it, and that is not going to change overnight. Only Germany has serious trade with China, as it makes the machinery and motor vehicles Beijing is buying in large quantities.

    China isn't investing much in Europe either, less than 1bn euros last year. That was little more than 1% of foreign investment in Europe, which pumped five times as much into China.

    While many outside China view its leaders as strong, masters of a rising power, many in China see them as cautious, consensual, hemmed in by problems at home. President Hu has just a year left before he's due to step down, so he's unlikely to take radical decisions right now.

    China is trying to slow its own economy, to control inflation, to unwind the massive investment and credit boom it used to get through the last global crisis, to keep a lid on rising protests. What would help Europe is if Chinese consumers bought much more, but that will take time to happen.

    In the meantime Beijing has talked at various points in the past year or so about stepping in to help Greece, Portugal and Italy. But it has not done much, understandably wary about losing if it invests rashly now in the middle of a crisis.

    China has huge holdings of euros and Europe is important to China, so it will invest, but on a clear-headed, commercial basis. Just don't expect China to save the world.


    BBC News - Why China won't save the world
     
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  3. RedDragon

    RedDragon Regular Member

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    Why should we save Europe? The people of the country like Greek enjoy a luxury life, and let the poor Chinese peasant pay the bill?
    But I think now it is a good chance to buy some good business or company.
     
    singa likes this.
  4. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    They are as broke as Greece, how could they save the world?
     
    ganesh177 likes this.
  5. RedDragon

    RedDragon Regular Member

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    Broke or not, China will not pay the bill for Europe.
     
    singa likes this.
  6. cir

    cir Senior Member Senior Member

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    India is a filthily rich democracy. India should come out, pay up and save the world. :rofl:
     
  7. RedDragon

    RedDragon Regular Member

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    Yes, you are right, they really should beg India for the money
     
  8. niceguy2011

    niceguy2011 Tihar Jail Banned

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    We will pay only YUAN to them or not pay. The ball is at EU's side now.LOL
     
  9. jat

    jat Regular Member

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    Time will tell what the CCP does. If they bail out Europe, the Europeans will have no choice but to buy Chinese goods to pay the CCP back.
    "we" does not exist in China, the CCP is a minority government with absolute power. You make it sound like you are in charge of China's destiny. Sorry to break your bubble but you are in now way the ruler of China, yet. ;)
     
  10. nimo_cn

    nimo_cn Senior Member Senior Member

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    if we do something, they are going to accuse us of taking them over; so we choose to do nothing, but they are blaming us for not being responsible for the world. It is indeed a dilemma for China.

    By the way, Europe is not the world, it is just Europe
     
  11. asianobserve

    asianobserve Elite Member Elite Member

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    China needs to stimulate its domestic demand if it wants to stay on top. But this is easier said than done. China is still largely a third world country, the majority of Chinese are still dirth poor and will be in such condition for a long time. In fact the disparity between the gainers of its economic liberalisation and the have nots is so wide and so pronounced that this is one area of concern for China.
     
  12. Neil

    Neil Senior Member Senior Member

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    if greece goes bankrupt...it will have dominoes effect on all of west....which will then affect the rest of the world...more so china...plus you have one of the largest foreign reserves in the world so why not save your n greece as* together...its a win win situation...
    plus it creates goodwill among people...
     
  13. aimarraul

    aimarraul Regular Member

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    because china can't.......Being the biggest developing country, the best thing we can do is to address our own problems.
     
  14. RedDragon

    RedDragon Regular Member

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    LOL, You are so funny.
    Anyway Chinese will not pay even one penny for the Luxury life of European.
    And we also don't worry they don't have money to buy our goods. People can live without GUCCI, but can't live without the cheap T shirt, especially when the economic is not good.
     
  15. RedDragon

    RedDragon Regular Member

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    No pay, No gain. If they want we open the wallet, let's see what their offer.
     
  16. aimarraul

    aimarraul Regular Member

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    New Delhi: Finance Minister Pranab Mukherjee on Wednesday hinted at financing for sorting out Eurozone crisis after a credible assessment of solvency problem is made.
    "Our assessment of the situation is let them (Eurozone) make a credible assessment of solvency issue, try to sort out those problems and then after supplementary financing could be considered. Let us see what the leaders decide," he told.
    He was replying to a query on the Greece government's decision to seek referendum on a proposed EU rescue package which has created a fresh turmoil in the financial markets.
    The European solvency issue should be sorted out by the European nations themselves, Pranab Mukherjee said.
    Mukherjee said even at the G-20 finance ministers meeting in Paris, India had maintained that the European solvency issue should be sorted out by the European nations themselves.
    "Let us see what the leaders decide (at the Cannes G20 meeting beginning tomorrow)," he said.
    Prime Minister Manmohan Singh has left for France to participate in the two-day Summit of world's 20 leading economies (G20) to signal a "strong and coordinated approach" to put the global economy back on track, while addressing medium term structural issues.
    Several European nations, including Greece, Portugal and Spain, are facing financial problems and a sovereign default is expected to have a severe impact on the whole region.

    India may consider financing bailout of Eurozone: FM - India News - IBNLive


    Let india save the world 8)
     
  17. RedDragon

    RedDragon Regular Member

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    wow! Cool!
     
  18. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    Eurozone needs to be saved for the sake of greater good of the world.
     
  19. badguy2000

    badguy2000 Respected Member Senior Member

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    well, it should be France to save the ass of Euro....


    I think that generous frenchmen like Mr. Armand will be glad to do soo..
     
  20. JayATL

    JayATL Senior Member Senior Member

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    Everyone has skin in this game. Chin and India especially because of trade it does with EU and how dependent their economies are on the EU not going down. here is a great example of what happened in Greece.

    A person in greece retires at 52 years of age ( freaking unheard of ) and gets govt mandated pension of $48,000/ year. ( over 2 times what US citizens get at the highest level on social secruity)

    Greece to keep this for its citizens has borrowed from world banks.

    The same banks that also give US, India, china etc loans and are critical to the global economy. If those banks fail and go down because greece does not pay its bills- that means europe is screwed and its consumers are phucked --- but also that other countries get the brunt of those resources becoming non existant!

    This is a global economy, and it is imperative for everyone to save this cluster phuck. Greece must agree to austerity measures, just like IMF is telling pakistan to do if they want the bailout!

    Greece is being extremely irresponsible by now , after EU agreed to bail it out- saying it will put it to a public vote! you can't have the public say anything on this because they are too dumb to understand the consequences of a no vote. This has to be done in their parliment....
     
    Last edited: Nov 3, 2011
    amoy likes this.
  21. redragon

    redragon Regular Member

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    As what Armand said and agreed by almost all Indian members in this forum, China is doomed/bankrupt, so China can't save the world, France and India are fully ready to save the world anytime, I think all those european leaders are not in their right mind to waste their time with Hu, jintao.
     

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