Hu seeks eurozone stability
Updated: 2011-11-03 08:08
By Wu Jiao (China Daily)
The September unemployment rate in the eurozone has recorded a fifth consecutive monthly rise to reach 10.2 percent, a eurozone record. October growth figures for the EU service and manufacturing sectors experienced their largest drop in two years, with the market confidence index the lowest since 2009.
European leaders had agreed at the end of October to a $1.4 trillion rescue fund to stop the debt crisis in Greece from bleeding into other shaky eurozone economies.
The governing council of the European Central Bank will meet on Thursday to announce a fresh round of measures to help the fragile banking sector.
Yet stock markets have been rattled over the last two days by the Greek prime minister's decision to hold a referendum on the proposed bailout.
The G20 summit in Cannes, according to Thomas Klau, head of the Paris bureau of the European Council on Foreign Relations, has already, in all probability, been "transmuted into yet another eurozone crisis summit" entrusted with restoring its collective credibility.
Europe is looking to China to foot part of the rescue bill, the European Financial Stability Facility (EFSF). Yet China has legitimate concerns about getting too involved and is seeking fuller operational details. Besides, buying more eurozone debt is not on the G20 agenda.
Hu is scheduled to meet French President Nicolas Sarkozy late on Wednesday night, the first bilateral meeting Sarkozy has planned for his G20 schedule.
It has also been reported that the BRICS (Brazil, Russia, India, China and South Africa) will meet ahead of the G20 summit to agree a consensus.
Analysts said Hu's remarks convey confidence in the coming summit, as growing global economies also serve the interests of China.
Wang Yizhou, a scholar with the School of International Studies at Peking University, said China's help to the EU might not be limited to buying bonds.
It could be in the form of tariff reduction and enhancing trade, Wang said.
"Given that China is facing slowing economic growth, whatever it agrees cannot be at the expense of its own economy," said Wang Yiming, deputy director of the Institute of Macroeconomics at the National Development and Reform Commission (NDRC).
Maintaining robust growth itself has been a major contribution to the global economy, Wang said.
Economic restructuring and boosting domestic consumption is, for now, the best help that China can offer the global economy, Wang Yiming said.
Experts also said that the IMF remains a reasonable channel for China to extend its help in stabilizing the world economy.
"I don't think that China should provide money to other channels, for example, the EFSF," said TJ Bond, a senior economist at the Bank of America Merrill Lynch, who believes that China can work with the existing international financial institutions, such as the IMF, to help the European countries.
Because of the lack of details that leave critical questions unanswered, China should not hurry into the buyers list of the EFSF, said Wang Haifeng, director of the International Cooperation Center affiliated to the NDRC.
Li Xiang and Chen Jia contributed to this story.