Why China Can’t and Won’t Save Europe, Part II

Why China Can’t and Won’t Save Europe, Part II

Editor’s note: This is the second of a two-part series on the unlikelihood of a Chinese contribution to a financial bailout of Europe. Part I examined the domestic obstacles to a Chinese contribution. Part II examines the European obstacles to a Chinese contribution.

SHANGHAI -- Due to multiple ideological and practical obstacles, major Chinese participation in any European rescue plan would require significant material concessions from European leaders to gain any traction among Chinese policymakers and citizens. So far, proposed concessions have been largely symbolic, such as promises to recognize China's market economy status. Moreover, China prefers to deal either directly with national governments or in multilateral settings such as through the International Monetary Fund (IMF), rather than with the European Union. Far more tangible quid pro quos would be necessary to induce China to participate directly in any bailout package, and even indirect participation via an expanded IMF lending facility would require major adjustments to the European position.

The major reason Beijing prefers a country-by-country approach to European bond purchases, while pushing for multilateral action via the IMF or G-20, is that in both settings the demarcation of sovereignty is much clearer than at the EU level. As a result, Beijing feels that quid pro quos are easier to arrive at. The example of Sino-Italian relations neatly demonstrates Beijing's preferred trade-off of bond purchases in return for strategic investment access. Neither the European Central Bank (ECB) nor the European Financial Stability Facility (EFSF) are mandated to even discuss any such deal, and reaching consensus on China through other EU mechanisms has often proved complicated.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.