Tuesday

23rd May 2017

Focus

China: EU bailout leaves 'fundamental problems' unresolved

  • Close up of Chinese banknote -Beijing is wiling to take a gamble on Greece for the sake of long-term trade ties (Photo: dolmansaxlil)

China's ambassador to the EU has said Greece might default despite EU and IMF efforts, but indicated that Beijing will continue to support the single currency.

"Despite the recent payment of €12 billion by the EU and IMF, some of the fundamental problems in Greece have not yet been resolved ... People are still discussing if there will be a restructuring [of Greek debt] or a default, obviously a restructuring would have much smaller negative consequences," ambassador Song Zhe told press at an event in Brussels on Friday (8 July).

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.

Reacting to analysts who say Beijing is buying risky bonds in Greece, Ireland, Italy, Portugal and Spain in order to gain political influence in the EU, Song said the purchases have no "suspicious" motive.

With EU-China trade growing to €480 billion in 2010, the ambassador noted: "We can build stronger trade ties only by investing in a sound EU economy. We hope in this way to bring back the stability of the euro so that in the future we can move ahead [on trade issues] more smoothly."

Song predicted the European Union as such will emerge from the crisis.

But when asked if he thinks China will get its money back from Athens, he answered: "Risk goes along with any kind of investment."

The Chinese diplomat also advised the major eurozone economies to dig deeper into their pockets: "We hope that on the face of the difficulties the euro is facing, the core [euro-using] countries can unite to avoid this crisis."

Looking further afield, Song said he hopes to see the EU and China "fully open up markets" in future.

Trade ties, despite growth of over 30 percent last year, have been bedevilled by accusations of Chinese dumping and counter-accusations of EU protectionism.

Some of the disputes have strategic implications - China is limiting exports of rare earth minerals, used in the arms industry and high-end technology, amid fears it plans to force manufacturers to relocate to China and share intellectual property.

Meanwhile, the EU is sticking by its arms embargo on China in deference to US concerns about its emergence as a military threat.

Song said that China is also limiting rare earth extraction at home for the sake of the environment.

On the arms embargo, he noted: "We have no interest in buying arms from Europe ... Chinese defence capacity has been developing very well over recent years and the EU has lost out on a part of this business."

In an allusion to US influence on the arms embargo, he added the EU should "make decisions on its own" on long-term China relations.

China: 'You can't depend on us alone to rescue Greece'

A 'regular' phone call between EU commission chief Jose Manuel Barroso and Chinese Prime Minister Wen Jiabao on Friday morning was aimed at reassuring markets that China will continue to support the ailing eurozone. But a Chinese diplomat noted that Beijing will only buy those bonds guaranteed to be paid back.

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.

Investigation

Fight club: Russian spies seek EU recruits

Russian intelligence services are using martial arts clubs to recruit potential troublemakers in Germany and other EU countries, security experts have warned.

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