The Eurozone’s debt crisis has spurred talk about a possible role for BRIC countries to lend a helping hand through increased financing of the International Monetary Fund (IMF). While discussions are still under way over whether the IMF will even step into the euro crisis, rising powers such as China and Brazil continue to express interest. G20 finance ministers and central bankers met in Paris over the weekend and said they expected the October 23 European Union summit to “decisively address the current challenges through a comprehensive plan“. Today’s blog post highlights the views in China, India, and Russia on this issue:
CHINA
The mixed views in China indicate an interest to help the Eurozone in such a way that is both economically practical and politically beneficial to China-EU relations.
- Several op-eds in the People’s Daily highlight China’s shouldering of responsibility in global finance. They point to China’s purchase of European debt securities, expressed confidence in the Eurozone, and continuing trade and investment relations with the EU.
- Nevertheless, some voices emphasized that “China has to be cautious while expanding in Europe,” and consider “many factors including investment return, security, risk and national interests.”
- Ding Gang, a senior reporter with the People’s Daily, was more blunt about what China should expect in return: It is only “the most basic fair treatment” to ask that the EU recognize China’s market economy status and end the arms sale ban on China.
- Specific policy recommendations came from a recently organized academic forum at Tongji University. It was reported that Qiao Yide, secretary-general of the Shanghai Development Research Foundation, recommended the following: 1) purchase bonds from multilateral institutions (the European Financial Stability Facility) instead of national bonds; 2) encourage Chinese businesses to expand in Europe; and 3) increase the euro’s weight in the currency basket of the Chinese yuan.
- A Global Times op-ed commented on the geopolitical opportunity of the crisis. (more…)
OCT
With the deadline for a U.S. credit default just two weeks away, concern mounts over the consequences of a U.S. government delay or paralysis in resolving the debt ceiling crisis. Overseas, countries holding large sums of U.S. Treasury securities are watching the debate with heightened apprehension and scrutiny. In this post, we examine Chinese, Russian, and Indian views on the U.S. debt impasse.