Do the Chinese really want to help Europe?

28th October 2011

The signals according to the paper are mixed.

The paper notes that the state-owned China Daily newspaper said on Wednesday that China and other top emerging economies had agreed to help eurozone countries by contributing to the bailout fund.

But on Thursday China's state Xinhua news agency said Europe needed to take responsibility for the crisis, and not rely on "good samaritans" to rescue the continent.

French President Nicolas Sarkozy is also quoted saying: "If the Chinese, who have 60pc of global reserves, decide to invest in the euro instead of the dollar, why refuse? Our independence will in no way be put into question by this."

This report in Investment Week might undermine Sarkozy's view. The website reports that Chinese officials say that Europe must stop criticising China as part of any funding deal – only its currency policy – so far anyway.

On the record, China says it wants more detail. Website RTHK quotes vice finance minister Zhu Guangyao. He says: "We need to wait for the technicalities to be clear and also to carry out serious studies before we can decide on investment. We hope that all these technical and specialised arrangements can be thrashed out at an early date and can be implemented and feasible. That will be very important for the effectiveness of the fund."

Papers even divide on just how bullish even Regling is. In some report he is optimistic but on Euronews he says there will be no quick deal.

On Citywire Chris Marshal suggests that the crisis has underpinned a big switch in power to the central banks of growth markets. 

It quotes a Merrill Lynch note saying: ‘One crucial group of actors in this volatile global shift is the central banks, as nations and markets naturally divide more and more along new fault lines…these economies will continue to grow, giving their central bankers increasing sway over the world's markets."

But it is the Chinese who remain the first among equals among the growth economies.  Citywire writes "the People's Bank of China (PBOC) – that's the real power broker. The PBOC, with its vast reserves, is set to become more powerful than the Fed – some say it's already there. After all, how China handles its inflation and the country's economic slowdown is arguably the real threat to the world economy, bigger than the eurozone mess."

More from Mindful Money:

Eurozone Debt Crisis: LIVE

Creativity and financial crisis: Will this provide the answers?

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