February 1, 2012
Many in Europe have been eyeing Beijing's trillions as a possible solution to the continent's debt crisis. During her trip to China, German Chancellor Angela Merkel plans to promote investments in the debt-ridden euro-zone countries. But the Chinese have so far been tight with their money. Will Merkel succeed in getting Beijing to bend?
The caricature of the euro shows a small and ailing little man -- unshaven, bandaged and weak, his eyes peering down at the ground in humility and carrying an old hat in his right hand to collect money. Angela Merkel, who is accompanying this sad creation, looks serious as she knocks on the imperial gate seeking entry -- and to plead for a small handout for her problem child.
The picture created by a caricaturist for China's English-language Global Times newspaper isn't a very nice one. But there is a nugget of truth in the exaggerated image. Merkel isn't exactly going to be begging when she begins her three-day visit to China on Wednesday, but neither will she be opposed to leaving the country with one or more deals bringing multi-billion Chinese investments to the debt-plagued euro zone.
This is Merkel's fifth visit to China, with relations intensifying considerably in recent years. This time, however, German government officials have said they are "extremely pleased with the timing" because the trip is taking place just after the most recent European Union crisis summit, where a pact for stricter budget discipline in Europe was agreed, which Merkel touted as a "masterpiece." The chancellor now wants to explain the pact to the Chinese "first hand," say officials in Berlin. According to government sources, the chancellor, who also heads the conservative Christian Democratic Union (CDU) party, wants to report to Beijing on how Europe is moving down the path toward a stability union. "It is important to foster confidence in the euro zone," the official said.
That confidence should hopefully pay dividends. China is the world's second largest economy. Even though its economy has been cooling down lately, the country still had a growth rate of 9.2 percent in 2011, a figure Europeans can only dream of. The country also has estimated currency reserves of $3.2 trillion -- money that could be used to help the Europeans stabilize their common currency. The German government is also fond of pointing out that a stabile euro zone and a strong euro are also very much in the interests of the Chinese -- a fact that has been reiterated numerous times by the leadership in Beijing.
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