Is Spanish wine good for an ordinary Chinese?

China is ready to give a hand to Europe on condition of the latter’s adequate attitude towards it. While Paris and Berlin are incapable of coordinating steps to save the Euro zone, Beijing becomes a real force in the stabilisation of the situation. However, experts point out that developed countries may have to pay for this.

At the World Economic Forum in Chinese Dalian this week, the Chinese prime minister pointed out that “the European economy can start to grow again”, so Beijing intends to step up investment in Europe. Wen Jiabao stressed that an important condition for this is granting China the status of a country with a market economy. Alexander Salitsky from the Institute of World Economics and International Relations at the Russian Academy of Sciences explained to The Voice of Russia why this is so vitally important to China.

“If a country is recognized as a country with a market economy, anti-dumping investigation of its merchandize becomes different. It becomes more difficult to prove that the prices for Chinese goods exported to the EU are too low. I find China’s requirements quite appropriate. The growth of prices and incomes in China results in higher production costs in that country. China has the same level of prices as South Korea  and Taiwan now. The consumption increase in that country is considerably higher than in developed countries”.

Recently the media have been actively discussing the topic of the Euro zone receiving assistance from BRICS and first of all from China. China was reported to be ready to buy Italian government bonds. Alexander Salitsky supposes that China is deliberately appealing to Europe and demonstratively ignoring  the USA.

"China is showing in many ways, including the message form Dalian, that it is more inclined to help the European and not the US economy. This is explained by a larger number of contradictions in China’s political relations with Washington. For example, Europe is more careful in the issue of currency exchange rates."

Experts point out that it is time for Europe to give up its habitual didactical manner in the dialogue with China. If talks on recognizing China as a country with a market economy begin, the EU will have to agree upon all details and maybe even make some concessions. Economic growth cannot be achieved only with investment, believes Professor Patrick Chovanec of the Beijing Tsinghua University’s School of Economics and Management.

“China can save Italy and the entire EU. It can fill markets with cash. However, in a long-term perspective, China which accumulates huge financial resources and then lends them to Europe only aggravates the situation because one of the reasons for problems in the EU is the growing trade deficit in operations with China. Europe’s growth could be restored if Beijing, for example, started buying  European goods instead of lending the EU money.”

For the last 6 years the volume of Chinese investment in the European economy has grown by more than 6 times and in the world economy more than 20 times. Small wonder that Italian authorities did not deny the information about talks with Beijing. No other country has ever had such huge monetary reserves as China. And the “blood and tears” savings package adopted by the Italian parliament yesterday and meant to save the national economy requires multi-billion cuts. In the context of people’s tough protests round the parliamentary walls and the national trade unions promises to raise people to new actions, Italian authorities have almost no space left for manoeuvring.