China has a role to play in the bailout of the Eurozone but on its past cautious record its contribution will not be a game changer. Any democracy movement worth the name would be crushed, but the country’s leaders are wary of being seen bailing out Europeans, while millions of its own people face extreme hardship.
One reason why the Chinese are such dedicated savers is because the state provides little support for its ill and old.
Even so the gradual spread of Beijing’s overseas investments beyond the US to Europe is one further sign of the shift of influence from the old to the new economies.
China’s self-interest demands it supports Europe, its biggest trading partner. But the price it will seek in return will be considerable.
Currently China meets obstacles in the West when it goes shopping for industrial and technological assets; it faces subsidy and anti-dumping suits; and pressure to stop holding down the value of its currency.
The deeper the West finds itself in hock to the Chinese, the greater will be Beijing’s strategic clout as it counters these challenges to its expanding international power.
We got into bed with plenty of unsavoury Middle Eastern dictators over the years to secure oil supplies. It looks like we’ll have to cosy up to the Chinese in much the same way; for oil read cash.