Europe on a Chinese Shoestring

For months, EU leaders and IMF officials have been hoping that China would lend a hand to save the euro. But China will give nothing unless the EU makes certain concessions, including conferral of market-economy status.

BEIJING – Will China help to rescue the euro, or not? In August, Premier Wen Jiabao said that China was ready to assist Europe in its hour of need. But, in December, at the Lanting Forum in Beijing, Deputy Foreign Minister Fu Ying declared that China could not. “The argument that China should rescue Europe does not stand, as reserves are not managed that way,” she announced.

For months, European leaders and International Monetary Fund officials have been hoping that China would lend a hand to save the euro. But Wen proposed certain conditions, including the European Union’s recognition of China as a market economy. Europe’s leaders, however, have not agreed to this or any other of Wen’s conditions. Hence, Fu’s insistence that China can do nothing to help.

Market-economy status is largely symbolic, but it is important to China. European Commissioners and lawyers are currently engaged in a heated debate about whether the World Trade Organization should automatically grant China this status in 2016. Whatever the outcome, the benefits are marginal; the primary benefit of market-economy status for China is that it would preclude anti-dumping charges under WTO regulations.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

http://prosyn.org/W74PoJD;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.