Monday

30th May 2016

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.

Does Italy need €14bn of EU budget waivers?

The EU Commission has agreed to relax Italy’s deficit targets. That could help Renzi ahead of this week's local elections and in a later referendum on constitutional reforms.

News in Brief

  1. Juncker to seek renewed backing for TTIP talks
  2. EP president rules out return to German politics
  3. Austrian far-right wants to probe election fraud accusations
  4. Irish PM warns Brexit could bring back border controls
  5. Truckmakers risk record cartel fine
  6. London mayor teams up with British PM on Brexit
  7. Syrian refugees sue Denmark over immigration law
  8. Ukraine bans Gorbachev for backing Crimea's seizure

Stakeholders' Highlights

  1. ACCAEducation and Training 2020 - Giving Young People the Workplace Skills They Need
  2. EPSUTrade Unions Back New Undeclared Work Platform
  3. European Healthy Lifestyle AllianceCould targeting children’s fitness boost academic performance?
  4. World VisionDeclares the World Humanitarian Summit a Positive Step in a Longer Journey to Ending Need
  5. EJCPresident Dr. Moshe Kantor on Brexit and the Jewish Question
  6. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  7. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  8. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  9. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  10. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  11. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  12. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan

Latest News

  1. Juncker agrees to visit Russia in June
  2. Pro-Brexit Tories predict Cameron leadership challenge
  3. Merkel and Hollande pledge unity at Verdun ceremony
  4. Russia mocks ex-Nato chief's new Kiev job
  5. Poland, migration and environment on the agenda THIS WEEK
  6. Does Italy need €14bn of EU budget waivers?
  7. More than 700 migrants feared dead in Mediterranean
  8. EU to scrutinise environmental action