Wednesday

24th May 2017

Focus

China central banker: EU is our biggest uncertainty

  • The EU is China's biggest trading partner (Photo: stuck_in_customs)

In a sign of growing confidence on the global stage, China on Monday (12 March) singled out Europe as the "biggest uncertainty" for the future of its economy.

The governor of China's central bank, Zhou Xiaochuan, said that a slow world recovery process and the unstable economic and financial situation in Europe will be the big unknowns for China's economy this year.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Speaking on the sidelines of the National People's Congress in Beijing, Zhou was quoted by Reuters as saying that "the biggest uncertainty in the international economic situation, as we all know, is the economic recovery process, especially the European economy and financial market development relating to the euro sovereign debt crisis."

The comment has sparked a mix of reactions from commentators in Brussels.

"It is amazing," says Pierre Defraigne, director of the College of Europe Madariaga Foundation and a long-time scholar on EU-China relations. "I don't remember someone of such a high level speaking so bluntly."

He says that the comment reveals a painful truth that European leaders are afraid to admit.

"The EU has become the main source of uncertainty in the global economy. We should be thankful to the [central bank's] governor for telling us that the emperor has no clothes on."

Lin Goethals, programme director at the European Institute for Asian Studies, says that the comment represents a new phase in EU-China relations.

"It used to be the other way around," she says, "Europe bashing China."

But ever since the financial crisis, and in particular since the EU saw it necessary to postpone an EU-China summit in October due to a rapidly deteriorating situation at home, the tables have been turning, she says.

"Honestly, I am not surprised. It is actually something China is really worried about."

The EU is China's biggest trading partner. China is the EU's second-biggest trading partner, after the US. But relations between the two economic powerhouses have soured of late.

The central banker's comment comes amid several ongoing trade wars including in aviation, public procurement and, most recently, rare earth elements.

China's embassy to the EU, meanwhile, is eager to downplay the comment.

Zhang Kening, minister counsellor for economic and commercial affairs, told EUobserver that there has been "a misinterpretation" of the governor's words due to a lack of direct interpretation into English.

In reality, he says, the governor spoke of the world economy and the European financial situation as uncertain factors influencing China's currency policy.

For its part, the European Commission at the time of writing had not yet heard of the banker's comment and was not able to comment.

Barroso to China: EU is not falling apart

European Commission chief Jose Manuel Barroso has told the Chinese public that the EU is going to become a fully-fledged "political union" after the financial crisis.

China confronts EU on aviation tax

China has banned its airlines from taking part in Europe's Emissions Trading System, which forces all airlines flying in and out of Europe from 1 January this year to buy pollution permits.

No trade war with China, EU presidency says

Business between the EU and China is running as usual, despite highly-public trade differences between the two economic powerhouses, the Danish trade minister has said.

China urges Germany and France to solve euro-crisis

Chinese Prime Minister Wen Jiabao on Thursday offered vague promises to buy bonds from troubled euro-countries, but said that it is ultimately up to Germany and France to solve the crisis.

News in Brief

  1. Pressure grows on climate impact of EU timber harvesting
  2. US goes after Fiat Chrysler over emissions cheat
  3. Munich police break up Europe-wide burglar clan
  4. Report: VW threatened with €19.7 billion French fine
  5. Turkey begins mass trial of suspected coup leaders
  6. Merkel's CDU consolidates lead in polls
  7. France to host Russian president
  8. Switzerland votes against nuclear power

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms

Latest News

  1. Openness over Brexit is 'political play', says EU ombudsman
  2. Le Pen's EU group in fresh spending scandal
  3. New EU right to data portability to cause headaches
  4. Cyber threats are inevitable, paralyzing impact is not
  5. Transparency complaints keep EU Ombudsman busy
  6. EU sets out criteria for relocating UK agencies
  7. EU states back bill against online hate speech
  8. Dutch coalition talks collapse again