Yet far from swagger, China’s leaders appear to be approaching this seminal moment with caution and outright concern.
China’s leaders will contribute to Europe’s bailout fund, economists and other analysts here said. But they are doing so mainly because they have little choice, since a continued economic crisis in Europe is bad for China, too.
“It’s not only about saving Europe, but the U.S. and the whole world, including China itself,” said Yi Xianrong, director at the financial research center of the Chinese Academy of Social Sciences. “A stable global financial system is also in China’s own interest.”
Patrick Chovanec, who teaches at Tsinghua University’s school of economics and management, agreed. “It may seem like an all-powerful creditor and weak, supplicant debtors,” he said. “But the debtor countries and the surplus country are locked in a mutual embrace that is problematic for both of them.”
Chovanec compared the situation to that of a small-town shopkeeper who has to continue letting his customers build up credit, for fear that if he doesn’t, they will stop coming and he will be forced out of business.
China’s ability to assist Europe — and to bankroll the U.S. debt through the purchase of Treasury securities — comes from its huge surpluses. The European Union, China’s largest export market, has a trade deficit with China of about $230 billion.
China’s leaders also are moving cautiously because they are acutely aware that Chinese public opinion is firmly against helping bail Europe out of its debt crisis. Comments on the hugely popular
Twitter-like microblogging sites, called weibo, offer a window into the popular sentiment.
For China’s netizens, Europeans enjoy a rich lifestyle with lavish early-retirement packages and several weeks of paid vacation each year, while the majority of Chinese can barely earn enough to make a living. So why should China’s government be using its hefty reserves — the people’s money — to help Europe instead of improving living conditions at home?
“The root of the heavy European debt is excessive welfare,” wrote one weibo user under the name “Turbulence and Change.” “They have a large number of lazy people. Even if China doesn’t offer a hand, Europeans still won’t live worse than Chinese. Furthermore, no European will die of hunger.”