China - China losing patience with Europe: analysts

BEIJING: Top leaders from China and the European Union were scheduled to meet in Tianjin this week for talks expected to focus on the European debt crisis.

But the summit was postponed, with European leaders opting to stay home for a second round of crisis talks.

Analysts say China is getting impatient with the state of affairs in Europe, and the postponement of the China-EU summit has done little to shore up confidence.

Alistair Thornton, China analyst at IHS Global Insight, said: "I think China is extremely worried. The EU makes up China's largest trade partner. I think it was startlingly clear in 2009 how exposed China is to the jolts in the global economy. In that respect, over the next 18 months, China's growth trajectory is almost wholly reliant on the trajectory of growth in the eurozone."

China has been increasing its investments in Europe.

It is buying eurozone bonds to diversify its US$3.2 trillion in foreign exchange reserves away from US treasury bonds.

Apart from that, analysts do not see any hope that China will be Europe's saviour.

Jonathan Holsag, head of research at Brussels Institute of Contemporary China Studies, said: "The Chinese are quite reluctant to go all out to supporting the eurozone because they believe the mechanisms for doing so are not yet fully developed. If you look for instance at the European Stability Fund, they aren't really confident that this will be enough.

"What matters the most for them is when they support countries in the European periphery like Greece, Spain or Portugal, there is also backing from the strong European member states like Germany, some of the Northern countries and to a lesser degree, France."

No date has been set for the next EU-China summit but China's calls to Europe to get their house in order have gotten increasingly louder in recent weeks, especially after China's exports grew at their slowest pace in seven months in September.

But analysts say China's calls on Europe will have little if any impact at all as EU leaders are more likely to place domestic interests at the forefront right now.

- CNA/fa


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