From Wieland Wagner, Spiegel: [T]he rising superpower is cleverly capitalizing on the euro crisis to extend its long-term political and economic influence in Europe. Chinese offers of aid are mainly directed at the shakiest members of the euro zone, the heavily indebted so-called PIIGS countries (Portugal, Ireland, Italy, Greece and Spain). The People’s Republic would like to win them over as long-term allies in the EU. …
Last July, China spent €400 million on Spanish 10-year government bonds. During a visit to Beijing in September, Spanish Prime Minister José Luis Rodríguez Zapatero dutifully thanked the Chinese: When China increases its share of Spanish government bonds, he said, it bolsters confidence in the financial markets. …
The People’s Republic has primarily set its sights on Greece as a bridgehead for its trade with Eastern Europe. Even before the current debt crisis, Chinese state-owned shipping giant Cosco signed a deal to lease port facilities in Piraeus for 35 years. By 2015, China intends to increase the annual transshipment of containers from the current 800,000 to 3.7 million, Premier Wen announced.
In the Irish town of Athlone, Chinese investors are considering building a gigantic conference and exhibition center for their export industry. From Beijing’s perspective, one of the advantages of this location is that Ireland is the only English-speaking country in the euro zone. In Portugal, energy giant China Power International is looking to buy a stake in local provider EDP; both companies want to collaborate to produce renewable energy in Europe, Africa and Brazil.
And in Italy, Prime Minister Silvio Berlusconi even had the Colosseum in Rome bathed in red light for Wen — and ordered the Chinese characters for "Sino-Italian friendship" projected onto the façade. Wen also promised the Italians that he would double the annual value of trade with them by the year 2015.
By pledging to help the debt-stricken PIIGS countries, China is ultimately boosting its own industry. Beijing also expects the Europeans to be more compliant on the political front: At a summit of EU representatives in Brussels in October, Wen rejected demands to devalue the Chinese currency. China maintains an artificially low exchange rate for the yuan, also known as the renminbi. This allows the Chinese to keep their exports cheap — including to countries in the euro zone.
During a brief visit with German Chancellor Angela Merkel, Wen secured support for a matter that he had unsuccessfully raised for years: Merkel promised that she would support China’s desire to be recognized as a market economy by the EU within five years. This would make it difficult for the EU to slap anti-dumping duties on inexpensive goods from China or denounce the country on charges of forced technology transfer.
The more EU countries become financially dependent on China, the greater the risk that they will end up facing the same dilemma that America has in its dealings with China. "How do you deal toughly with your banker?" US Secretary of State Hillary Clinton wrote, according to US diplomatic cables leaked to Wikileaks.
Translated from the German by Paul Cohen. (photo: DPA)
Image: dpa%2012%2016%2010%20George%20Papandreou%20Wen%20Jiabao.jpg