Wednesday

27th Jul 2016

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.

EU confrontation with Poland escalates

The EU commission said there is systemic threat to rule of law in Poland and gave new ultimatum. Poland said commission is "losing its authority".

Merkel faces backlash after killings

The German chancellor faces mounting criticism at home for her refugee policy after asylum seekers carried out several attacks over the last week.

Stakeholders' Highlights

  1. GoogleHelping Emergency Services Find You When You Need It Most
  2. Counter BalanceWhat's New in the Investment Plan for Europe: Business as Usual or True Innovation ?
  3. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016
  4. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  5. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  6. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  7. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  8. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  9. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  10. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  11. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  12. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company