Wen Jiabao, said that China will continue to invest in the Euro and in the European gilts and sovereign bonds right along the European markets, despite and perhaps because of the debt problems in the eurozone countries. The Premier said they will keep investing even more so of their Renminbi into Europe.
Chinese are lovers of bargains and this is one of the best opportunities to buy large chunks of the European Economies at a steep discount. The Chinese Mercantile behaviour is richly rewarded now. And so is the currency. As the Yuan is rising in a controlled floating fashion, the other global currencies lose strength.
Few hundred years from now we will be seeing another play called the Merchant of Canton playing alongside the Bard’s Merchant of Venice and getting the top bill. And there will not be references to golden Ducats but rather the golden rule of the Renminbi.
Because Europe is the key export market for Chinese manufacturers the confidence in the Euro and it’s common market only makes sense. On the face of it; the Chinese leadership are duly concerned that Europe’s problems could reduce demand for their own manufactured goods, just as their local businesses start to recover. But think a bit deeper and you’ll see that the play is for a far bigger game…
There are ends to the means, not visible with a naked eye.
To satisfy the one end, China has signed deals worth hundreds of millions of dollars with individual Greek shipbuilding and construction firms to help Greece overcome its debt crisis. These deals alone amount to several Billion Euro for the Greek economy and the jobs created help fund the recovery of Athens and stave off the threat of restructuring the Greek Sovereign debt, thus protecting the integrity of the whole Eurozone…
With the vast Chinese reserves of foreign currency the Euro investments take precedence in their mind as it is truly the European Common Market that is the largest market for China. Far outstripping even their own domestic market for goods, let alone any other country in the world. How is that for a powerful client market?
The pledge from the Chinese premier that China would continue to invest its reserves in European markets – now and in the future – is an important signal, that China had confidence in the euro and it is able to make money out of that relationship.
How is the definition of a client state? In those old dusty books of the Empire people still study at Eaton and Oxbridge is summed up pretty succinctly as above.
Yet the Sino-think, method, dictates a more amoral and simple people’s definition: A good and fair weather friend shows their true colours when the weather turns nasty. The bazaar dictates the terms of friendship and the markets concur here.
China is a good friend of Europe and an important ally when it really matters.
Well Done – both ends – accomplished.
Without shedding a drop of Blood…
just a fresh sprinkling of a few Renminbi
Yours,
Pano
PS:
In all fairness, the long standing Chinese ambition to decouple their reserves from their all kitty Dollar (sic), is best served this way also.
And with the Euro’s stability hinged on the increasingly competitive Renminbi, that the Dollar now tracks, the game comes full circle.
How is that, as a lesson in long term diplomatic thinking?
When others think of prosecuting little resource wars in the Middle East for chicken feed gains – turned into losses – the eternal Chinese arrange the next world currency to be the Yuan.
The Chinese leadership is Strategic beyond compare.
They can afford to wait fifty years and they do all they can to stave off Environmental collapse for they know that their people’s survival is at risk.
The rest, they have a good handle on.
PS2:
The renminbi literally means people’s currency.
Not a bad prelude to what the long term plan is for the Yuan’s future in our world.
The Default global reserve currency.
Now that’s the Power.
The Power that others like the Bushies, quietly surrendered in their follies, and toy soldier frollicking around the deserts, torturing the world through their sheer stupidity.
PS3:
Human beings are Economic beings..
Thus think the Chinese, having read their Aristotelian and Confucian texts…
Well before they are given any reigns of power.
