Europe-China Links Strengthened
During his visit to Germany, as part of a trip that included a China-UK Summit in the United Kingdom and a stop in Hungary, Chinese Premier Wen Jiabao reportedly offered to assist Europe with its debt crisis by buying up the sovereign debt of beleaguered euro zones if called for. While no specifics were revealed as to the extent of possible aid and which countries would be the recipients, some see the offer as a beneficial strengthening of ties between China and Europe, while others caution against looking to China to rescue Europe’s common currency. This is the first time Germany and China have consulted at ministerial level with the aim of boosting trade.
German Chancellor Angela Merkel noted that a stable euro is of great concern to China. Chinese officials have continued to express confidence in the euro currency throughout the current crisis, and Premier Wen Jaibao stated that China sees the problems of ailing euro zones as being of a temporary nature. Up to a quarter of the estimated $3 trillion China holds in foreign currency reserves consists of euro assets.
It has been noted in a CNN report that Europe’s trading trends have been shifting. While the focus is often on how low-cost products from Asia, particularly China, are flooding world markets, it is interesting to note that exports from European countries to Asia, again particularly China, are equally strong. Products being imported by China include high-quality designer goods, with the world’s largest Louis Vuitton store based in China. Other products exported to China include beverages, particularly wine and whiskey, and luxury vehicles. The economic development in China is providing a segment of China’s population with more disposable income, and an apparent desire for imported products. While it’s too soon to make predictions, bearing in mind the financial problems Europe is trying to overcome, some analysts are confident that, given time and perseverance, there will be balanced trade between Asia and Europe.
While increased trade between China and Europe is a mutually agreed upon goal, the issue of differing opinions on human rights remains a fly in the ointment. The day prior to Premier Wen’s departure for Europe, authorities released controversial activist and artist Ai Weiwei on bail, while at the same time emphasizing that this action should not be construed as a change in the ruling Communist Party’s policies. Chancellor Merkel acknowledge the activist’s release as a good thing, stressing that China should treat Ai Weiwei, and recently released human rights activist Hu Jian, in a fair manner, and allow greater freedom of the press. Time will tell if these admonitions will carry any weight with China’s authorities.